Correlation Between UDR and Alexandria Real

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

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

Diversification Opportunities for UDR and Alexandria Real

-0.15

Correlation Coefficient

UDR  Alexandria Real

Good diversification

The 3 months correlation between UDR and Alexandria is -0.15. Overlapping area represents the amount of risk that can be diversified away by holding UDR Inc and Alexandria Real Estate in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Alexandria Real Estate 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 Alexandria Real. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Alexandria Real Estate has no effect on the direction of UDR i.e., UDR and Alexandria Real go up and down completely randomly.

Pair Corralation between UDR and Alexandria Real

Considering the 90-day investment horizon UDR Inc is expected to under-perform the Alexandria Real. But the stock apears to be less risky and, when comparing its historical volatility, UDR Inc is 1.6 times less risky than Alexandria Real. The stock trades about -0.15 of its potential returns per unit of risk. The Alexandria Real Estate is currently generating about 0.09 of returns per unit of risk over similar time horizon. If you would invest  7,060  in Alexandria Real Estate on May 7, 2025 and sell it today you would earn a total of  652.00  from holding Alexandria Real Estate or generate 9.24% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Insignificant
Accuracy	100.0%
Values	Daily Returns

UDR Inc  vs.  Alexandria Real Estate

UDR Inc

Risk-Adjusted Performance

Very Weak

Over the last 90 days UDR Inc has generated negative risk-adjusted returns adding no value to investors with long positions. Even with latest weak performance, the Stock's fundamental indicators remain invariable and the latest agitation on Wall Street may also be a sign of long-running gains for the enterprise retail investors.

Alexandria Real Estate

Risk-Adjusted Performance

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in Alexandria Real Estate are ranked lower than 6 (%) of all global equities and portfolios over the last 90 days. In spite of rather unsteady basic indicators, Alexandria Real may actually be approaching a critical reversion point that can send shares even higher in September 2025.

Pair Trading with UDR and Alexandria Real

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

The idea behind UDR Inc and Alexandria Real Estate 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 AI Portfolio Prophet module to use AI to generate optimal portfolios and find profitable investment opportunities.