Correlation Between Centerspace and UMH Properties
Can any of the company-specific risk be diversified away by investing in both Centerspace 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 Centerspace and UMH Properties into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Centerspace and UMH Properties, you can compare the effects of market volatilities on Centerspace 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 Centerspace with a short position of UMH Properties. Check out your portfolio center. Please also check ongoing floating volatility patterns of Centerspace and UMH Properties.
Diversification Opportunities for Centerspace and UMH Properties
-0.23 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Centerspace and UMH is -0.23. Overlapping area represents the amount of risk that can be diversified away by holding Centerspace and UMH Properties in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on UMH Properties and Centerspace 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 Centerspace 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 Centerspace i.e., Centerspace and UMH Properties go up and down completely randomly.
Pair Corralation between Centerspace and UMH Properties
Considering the 90-day investment horizon Centerspace is expected to generate 4.61 times more return on investment than UMH Properties. However, Centerspace is 4.61 times more volatile than UMH Properties. It trades about 0.1 of its potential returns per unit of risk. UMH Properties is currently generating about -0.17 per unit of risk. If you would invest 7,095 in Centerspace on August 27, 2024 and sell it today you would earn a total of 276.00 from holding Centerspace or generate 3.89% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Centerspace vs. UMH Properties
Performance |
| Timeline |
| Centerspace |
| UMH Properties |
Centerspace and UMH Properties Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Centerspace and UMH Properties
The main advantage of trading using opposite Centerspace and UMH Properties positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Centerspace 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.The idea behind Centerspace and UMH Properties 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.| UMH Properties vs. American Homes 4 | UMH Properties vs. BRT Realty Trust | UMH Properties vs. Nexpoint Residential Trust | UMH Properties vs. Centerspace |
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 Performance Analysis module to check effects of mean-variance optimization against your current asset allocation.
Other Complementary Tools
| Piotroski F Score Get Piotroski F Score based on the binary analysis strategy of nine different fundamentals | |
| Portfolio Manager State of the art Portfolio Manager to monitor and improve performance of your invested capital | |
| Idea Optimizer Use advanced portfolio builder with pre-computed micro ideas to build optimal portfolio | |
| Cryptocurrency Center Build and monitor diversified portfolio of extremely risky digital assets and cryptocurrency | |
| Competition Analyzer Analyze and compare many basic indicators for a group of related or unrelated entities |