Correlation Between Flagship Communities and UDR

Can any of the company-specific risk be diversified away by investing in both Flagship Communities and UDR 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 Flagship Communities and UDR into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between Flagship Communities Real and UDR Inc, you can compare the effects of market volatilities on Flagship Communities and UDR 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 Flagship Communities with a short position of UDR. Check out your portfolio center. Please also check ongoing floating volatility patterns of Flagship Communities and UDR.

Diversification Opportunities for Flagship Communities and UDR

0.49

Correlation Coefficient

Flagship Communities  UDR

Very weak diversification

The 3 months correlation between Flagship and UDR is 0.49. Overlapping area represents the amount of risk that can be diversified away by holding Flagship Communities Real and UDR Inc in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on UDR Inc and Flagship Communities 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 Flagship Communities Real are associated (or correlated) with UDR. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of UDR Inc has no effect on the direction of Flagship Communities i.e., Flagship Communities and UDR go up and down completely randomly.

Pair Corralation between Flagship Communities and UDR

Assuming the 90 days horizon Flagship Communities Real is expected to generate 1.31 times more return on investment than UDR. However, Flagship Communities is 1.31 times more volatile than UDR Inc. It trades about 0.08 of its potential returns per unit of risk. UDR Inc is currently generating about 0.05 per unit of risk. If you would invest  1,525  in Flagship Communities Real on December 19, 2024 and sell it today you would earn a total of  111.00  from holding Flagship Communities Real or generate 7.28% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Weak
Accuracy	98.33%
Values	Daily Returns

Flagship Communities Real  vs.  UDR Inc

Flagship Communities Real

Risk-Adjusted Performance

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in Flagship Communities Real are ranked lower than 6 (%) of all global equities and portfolios over the last 90 days. Despite nearly unfluctuating basic indicators, Flagship Communities may actually be approaching a critical reversion point that can send shares even higher in April 2025.

UDR Inc

Risk-Adjusted Performance

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in UDR Inc are ranked lower than 4 (%) of all global equities and portfolios over the last 90 days. Even with relatively invariable fundamental indicators, UDR is not utilizing all of its potentials. The current stock price agitation, may contribute to short-term losses for the retail investors.

Pair Trading with Flagship Communities and UDR

The main advantage of trading using opposite Flagship Communities and UDR positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Flagship Communities position performs unexpectedly, UDR 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 UDR will offset losses from the drop in UDR's long position.

The idea behind Flagship Communities Real and UDR Inc pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.

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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 Sync Your Broker module to sync your existing holdings, watchlists, positions or portfolios from thousands of online brokerage services, banks, investment account aggregators and robo-advisors..