Correlation Between Citigroup and UMH Properties
Can any of the company-specific risk be diversified away by investing in both Citigroup 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 Citigroup and UMH Properties into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Citigroup and UMH Properties, you can compare the effects of market volatilities on Citigroup 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 Citigroup with a short position of UMH Properties. Check out your portfolio center. Please also check ongoing floating volatility patterns of Citigroup and UMH Properties.
Diversification Opportunities for Citigroup and UMH Properties
-0.31 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Citigroup and UMH is -0.31. Overlapping area represents the amount of risk that can be diversified away by holding Citigroup and UMH Properties in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on UMH Properties and Citigroup 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 Citigroup 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 Citigroup i.e., Citigroup and UMH Properties go up and down completely randomly.
Pair Corralation between Citigroup and UMH Properties
Taking into account the 90-day investment horizon Citigroup is expected to generate 1.82 times more return on investment than UMH Properties. However, Citigroup is 1.82 times more volatile than UMH Properties. It trades about 0.08 of its potential returns per unit of risk. UMH Properties is currently generating about 0.06 per unit of risk. If you would invest 4,377 in Citigroup on August 31, 2024 and sell it today you would earn a total of 2,639 from holding Citigroup or generate 60.29% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Citigroup vs. UMH Properties
Performance |
| Timeline |
| Citigroup |
| UMH Properties |
Citigroup and UMH Properties Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Citigroup and UMH Properties
The main advantage of trading using opposite Citigroup and UMH Properties positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Citigroup 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.| Citigroup vs. JPMorgan Chase Co | Citigroup vs. Wells Fargo | Citigroup vs. Toronto Dominion Bank | Citigroup vs. Nu Holdings |
| UMH Properties vs. American Homes 4 | UMH Properties vs. Mid America Apartment Communities | UMH Properties vs. Clipper Realty | 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 Stock Screener module to find equities using a custom stock filter or screen asymmetry in trading patterns, price, volume, or investment outlook..
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