Correlation Between BRT Realty and UMH Properties
Can any of the company-specific risk be diversified away by investing in both BRT Realty and UMH Properties 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 BRT Realty and UMH Properties into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between BRT Realty Trust and UMH Properties, you can compare the effects of market volatilities on BRT Realty and UMH Properties 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 BRT Realty with a short position of UMH Properties. Check out your portfolio center. Please also check ongoing floating volatility patterns of BRT Realty and UMH Properties.
Diversification Opportunities for BRT Realty and UMH Properties
0.7 | Correlation Coefficient |
Poor diversification
The 3 months correlation between BRT and UMH is 0.7. Overlapping area represents the amount of risk that can be diversified away by holding BRT Realty Trust and UMH Properties in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on UMH Properties and BRT Realty 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 BRT Realty Trust are associated (or correlated) with UMH Properties. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of UMH Properties has no effect on the direction of BRT Realty i.e., BRT Realty and UMH Properties go up and down completely randomly.
Pair Corralation between BRT Realty and UMH Properties
Considering the 90-day investment horizon BRT Realty Trust is expected to generate 1.34 times more return on investment than UMH Properties. However, BRT Realty is 1.34 times more volatile than UMH Properties. It trades about 0.05 of its potential returns per unit of risk. UMH Properties is currently generating about -0.03 per unit of risk. If you would invest 1,685 in BRT Realty Trust on October 24, 2024 and sell it today you would earn a total of 71.00 from holding BRT Realty Trust or generate 4.21% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
BRT Realty Trust vs. UMH Properties
Performance |
| Timeline |
| BRT Realty Trust |
| UMH Properties |
BRT Realty and UMH Properties Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with BRT Realty and UMH Properties
The main advantage of trading using opposite BRT Realty and UMH Properties positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if BRT Realty position performs unexpectedly, UMH Properties 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 UMH Properties will offset losses from the drop in UMH Properties' long position.| BRT Realty vs. Nexpoint Residential Trust | BRT Realty vs. Centerspace | BRT Realty vs. Veris Residential | BRT Realty vs. Apartment Investment and |
| UMH Properties vs. Sun Communities | UMH Properties vs. Clipper Realty | UMH Properties vs. UDR Inc | UMH Properties vs. American Homes 4 |
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 Analyzer module to portfolio analysis module that provides access to portfolio diagnostics and optimization engine.
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