Correlation Between UDR and FLOW TRADERS
Can any of the company-specific risk be diversified away by investing in both UDR and FLOW TRADERS 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 FLOW TRADERS into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between UDR Inc and FLOW TRADERS LTD, you can compare the effects of market volatilities on UDR and FLOW TRADERS 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 FLOW TRADERS. Check out your portfolio center. Please also check ongoing floating volatility patterns of UDR and FLOW TRADERS.
Diversification Opportunities for UDR and FLOW TRADERS
0.38 | Correlation Coefficient |
Weak diversification
The 3 months correlation between UDR and FLOW is 0.38. Overlapping area represents the amount of risk that can be diversified away by holding UDR Inc and FLOW TRADERS LTD in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on FLOW TRADERS LTD 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 FLOW TRADERS. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of FLOW TRADERS LTD has no effect on the direction of UDR i.e., UDR and FLOW TRADERS go up and down completely randomly.
Pair Corralation between UDR and FLOW TRADERS
Assuming the 90 days horizon UDR is expected to generate 2.07 times less return on investment than FLOW TRADERS. But when comparing it to its historical volatility, UDR Inc is 1.1 times less risky than FLOW TRADERS. It trades about 0.13 of its potential returns per unit of risk. FLOW TRADERS LTD is currently generating about 0.25 of returns per unit of risk over similar time horizon. If you would invest 1,760 in FLOW TRADERS LTD on August 28, 2024 and sell it today you would earn a total of 396.00 from holding FLOW TRADERS LTD or generate 22.5% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
UDR Inc vs. FLOW TRADERS LTD
Performance |
| Timeline |
| UDR Inc |
| FLOW TRADERS LTD |
UDR and FLOW TRADERS Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with UDR and FLOW TRADERS
The main advantage of trading using opposite UDR and FLOW TRADERS positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if UDR position performs unexpectedly, FLOW TRADERS 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 FLOW TRADERS will offset losses from the drop in FLOW TRADERS's long position.| UDR vs. Superior Plus Corp | UDR vs. NMI Holdings | UDR vs. Origin Agritech | UDR vs. SIVERS SEMICONDUCTORS AB |
| FLOW TRADERS vs. Macquarie Group Limited | FLOW TRADERS vs. MSCI Inc | FLOW TRADERS vs. Superior Plus Corp | FLOW TRADERS vs. NMI Holdings |
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 Portfolio File Import module to quickly import all of your third-party portfolios from your local drive in csv format.
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