Correlation Between UMH Properties and Veris Residential
Can any of the company-specific risk be diversified away by investing in both UMH Properties and Veris Residential 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 UMH Properties and Veris Residential into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between UMH Properties and Veris Residential, you can compare the effects of market volatilities on UMH Properties and Veris Residential 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 UMH Properties with a short position of Veris Residential. Check out your portfolio center. Please also check ongoing floating volatility patterns of UMH Properties and Veris Residential.
Diversification Opportunities for UMH Properties and Veris Residential
-0.17 | Correlation Coefficient |
Good diversification
The 3 months correlation between UMH and Veris is -0.17. Overlapping area represents the amount of risk that can be diversified away by holding UMH Properties and Veris Residential in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Veris Residential and UMH Properties 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 UMH Properties are associated (or correlated) with Veris Residential. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Veris Residential has no effect on the direction of UMH Properties i.e., UMH Properties and Veris Residential go up and down completely randomly.
Pair Corralation between UMH Properties and Veris Residential
Assuming the 90 days trading horizon UMH Properties is expected to under-perform the Veris Residential. But the preferred stock apears to be less risky and, when comparing its historical volatility, UMH Properties is 2.62 times less risky than Veris Residential. The preferred stock trades about -0.38 of its potential returns per unit of risk. The Veris Residential is currently generating about 0.49 of returns per unit of risk over similar time horizon. If you would invest 1,609 in Veris Residential on September 2, 2024 and sell it today you would earn a total of 216.00 from holding Veris Residential or generate 13.42% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
UMH Properties vs. Veris Residential
Performance |
| Timeline |
| UMH Properties |
| Veris Residential |
UMH Properties and Veris Residential Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with UMH Properties and Veris Residential
The main advantage of trading using opposite UMH Properties and Veris Residential positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if UMH Properties position performs unexpectedly, Veris Residential 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 Veris Residential will offset losses from the drop in Veris Residential's long position.| UMH Properties vs. American Homes 4 | UMH Properties vs. BRT Realty Trust | UMH Properties vs. Nexpoint Residential Trust | UMH Properties vs. Centerspace |
| Veris Residential vs. Urban Edge Properties | Veris Residential vs. Site Centers Corp | Veris Residential vs. JBG SMITH Properties | Veris Residential vs. Nexpoint Residential Trust |
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 Idea Analyzer module to analyze all characteristics, volatility and risk-adjusted return of Macroaxis ideas.
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