Correlation Between Healthcare Realty and UMH Properties
Can any of the company-specific risk be diversified away by investing in both Healthcare 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 Healthcare 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 Healthcare Realty Trust and UMH Properties, you can compare the effects of market volatilities on Healthcare 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 Healthcare Realty with a short position of UMH Properties. Check out your portfolio center. Please also check ongoing floating volatility patterns of Healthcare Realty and UMH Properties.
Diversification Opportunities for Healthcare Realty and UMH Properties
0.73 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Healthcare and UMH is 0.73. Overlapping area represents the amount of risk that can be diversified away by holding Healthcare 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 Healthcare 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 Healthcare 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 Healthcare Realty i.e., Healthcare Realty and UMH Properties go up and down completely randomly.
Pair Corralation between Healthcare Realty and UMH Properties
Allowing for the 90-day total investment horizon Healthcare Realty Trust is expected to under-perform the UMH Properties. In addition to that, Healthcare Realty is 1.26 times more volatile than UMH Properties. It trades about -0.04 of its total potential returns per unit of risk. UMH Properties is currently generating about 0.12 per unit of volatility. If you would invest 1,863 in UMH Properties on August 27, 2024 and sell it today you would earn a total of 61.00 from holding UMH Properties or generate 3.27% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Healthcare Realty Trust vs. UMH Properties
Performance |
| Timeline |
| Healthcare Realty Trust |
| UMH Properties |
Healthcare Realty and UMH Properties Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Healthcare Realty and UMH Properties
The main advantage of trading using opposite Healthcare Realty and UMH Properties positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Healthcare 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.| Healthcare Realty vs. Healthpeak Properties | Healthcare Realty vs. Sabra Healthcare REIT | Healthcare Realty vs. Community Healthcare Trust | Healthcare Realty vs. Universal Health Realty |
| 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 Price Ceiling Movement module to calculate and plot Price Ceiling Movement for different equity instruments.
Other Complementary Tools
| Transaction History View history of all your transactions and understand their impact on performance | |
| Insider Screener Find insiders across different sectors to evaluate their impact on performance | |
| Piotroski F Score Get Piotroski F Score based on the binary analysis strategy of nine different fundamentals | |
| Correlation Analysis Reduce portfolio risk simply by holding instruments which are not perfectly correlated | |
| Economic Indicators Top statistical indicators that provide insights into how an economy is performing |