Correlation Between UDR and Golden Agri-Resources
Can any of the company-specific risk be diversified away by investing in both UDR and Golden Agri-Resources at the same time? Although using a correlation coefficient on its own may not help to predict future stock returns, this module helps to understand the diversifiable risk of combining UDR and Golden Agri-Resources into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between UDR Inc and Golden Agri Resources, you can compare the effects of market volatilities on UDR and Golden Agri-Resources and check how they will diversify away market risk if combined in the same portfolio for a given time horizon. You can also utilize pair trading strategies of matching a long position in UDR with a short position of Golden Agri-Resources. Check out your portfolio center. Please also check ongoing floating volatility patterns of UDR and Golden Agri-Resources.
Diversification Opportunities for UDR and Golden Agri-Resources
-0.18 | Correlation Coefficient |
Good diversification
The 3 months correlation between UDR and Golden is -0.18. Overlapping area represents the amount of risk that can be diversified away by holding UDR Inc and Golden Agri Resources in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Golden Agri Resources and UDR is a relative statistical measure of the degree to which these equity instruments tend to move together. The correlation coefficient measures the extent to which returns on UDR Inc are associated (or correlated) with Golden Agri-Resources. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Golden Agri Resources has no effect on the direction of UDR i.e., UDR and Golden Agri-Resources go up and down completely randomly.
Pair Corralation between UDR and Golden Agri-Resources
Considering the 90-day investment horizon UDR is expected to generate 3.64 times less return on investment than Golden Agri-Resources. But when comparing it to its historical volatility, UDR Inc is 4.5 times less risky than Golden Agri-Resources. It trades about 0.04 of its potential returns per unit of risk. Golden Agri Resources is currently generating about 0.03 of returns per unit of risk over similar time horizon. If you would invest 20.00 in Golden Agri Resources on September 2, 2024 and sell it today you would earn a total of 0.00 from holding Golden Agri Resources or generate 0.0% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 65.12% |
| Values | Daily Returns |
UDR Inc vs. Golden Agri Resources
Performance |
| Timeline |
| UDR Inc |
| Golden Agri Resources |
UDR and Golden Agri-Resources Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with UDR and Golden Agri-Resources
The main advantage of trading using opposite UDR and Golden Agri-Resources positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if UDR position performs unexpectedly, Golden Agri-Resources can make up some of the losses. Pair trading also minimizes risk from directional movements in the market. For example, if an entire industry or sector drops because of unexpected headlines, the short position in Golden Agri-Resources will offset losses from the drop in Golden Agri-Resources' long position.| UDR vs. AvalonBay Communities | UDR vs. Essex Property Trust | UDR vs. Mid America Apartment Communities | UDR vs. Camden Property Trust |
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Check out your portfolio center.Note that this page's information should be used as a complementary analysis to find the right mix of equity instruments to add to your existing portfolios or create a brand new portfolio. You can also try the Stock Tickers module to use high-impact, comprehensive, and customizable stock tickers that can be easily integrated to any websites.
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