Correlation Between UDR and Yanzhou Coal
Can any of the company-specific risk be diversified away by investing in both UDR and Yanzhou Coal 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 Yanzhou Coal into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between UDR Inc and Yanzhou Coal Mining, you can compare the effects of market volatilities on UDR and Yanzhou Coal 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 Yanzhou Coal. Check out your portfolio center. Please also check ongoing floating volatility patterns of UDR and Yanzhou Coal.
Diversification Opportunities for UDR and Yanzhou Coal
0.19 | Correlation Coefficient |
Average diversification
The 3 months correlation between UDR and Yanzhou is 0.19. Overlapping area represents the amount of risk that can be diversified away by holding UDR Inc and Yanzhou Coal Mining in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Yanzhou Coal Mining 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 Yanzhou Coal. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Yanzhou Coal Mining has no effect on the direction of UDR i.e., UDR and Yanzhou Coal go up and down completely randomly.
Pair Corralation between UDR and Yanzhou Coal
Considering the 90-day investment horizon UDR Inc is expected to generate 1.04 times more return on investment than Yanzhou Coal. However, UDR is 1.04 times more volatile than Yanzhou Coal Mining. It trades about 0.32 of its potential returns per unit of risk. Yanzhou Coal Mining is currently generating about -0.22 per unit of risk. If you would invest 4,129 in UDR Inc on November 29, 2024 and sell it today you would earn a total of 243.00 from holding UDR Inc or generate 5.89% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
UDR Inc vs. Yanzhou Coal Mining
Performance |
| Timeline |
| UDR Inc |
| Yanzhou Coal Mining |
UDR and Yanzhou Coal Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with UDR and Yanzhou Coal
The main advantage of trading using opposite UDR and Yanzhou Coal positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if UDR position performs unexpectedly, Yanzhou Coal 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 Yanzhou Coal will offset losses from the drop in Yanzhou Coal's 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 Fundamental Analysis module to view fundamental data based on most recent published financial statements.
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