Correlation Between UMH Properties and BRT Realty
Can any of the company-specific risk be diversified away by investing in both UMH Properties and BRT Realty 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 BRT Realty into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between UMH Properties and BRT Realty Trust, you can compare the effects of market volatilities on UMH Properties and BRT Realty 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 BRT Realty. Check out your portfolio center. Please also check ongoing floating volatility patterns of UMH Properties and BRT Realty.
Diversification Opportunities for UMH Properties and BRT Realty
0.68 | Correlation Coefficient |
Poor diversification
The 3 months correlation between UMH and BRT is 0.68. Overlapping area represents the amount of risk that can be diversified away by holding UMH Properties and BRT Realty Trust in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on BRT Realty Trust 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 BRT Realty. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of BRT Realty Trust has no effect on the direction of UMH Properties i.e., UMH Properties and BRT Realty go up and down completely randomly.
Pair Corralation between UMH Properties and BRT Realty
Considering the 90-day investment horizon UMH Properties is expected to generate 0.83 times more return on investment than BRT Realty. However, UMH Properties is 1.2 times less risky than BRT Realty. It trades about 0.03 of its potential returns per unit of risk. BRT Realty Trust is currently generating about 0.01 per unit of risk. If you would invest 1,646 in UMH Properties on August 27, 2024 and sell it today you would earn a total of 278.00 from holding UMH Properties or generate 16.89% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
UMH Properties vs. BRT Realty Trust
Performance |
| Timeline |
| UMH Properties |
| BRT Realty Trust |
UMH Properties and BRT Realty Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with UMH Properties and BRT Realty
The main advantage of trading using opposite UMH Properties and BRT Realty positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if UMH Properties position performs unexpectedly, BRT Realty 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 BRT Realty will offset losses from the drop in BRT Realty's long position.| 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 Sign In To Macroaxis module to sign in to explore Macroaxis' wealth optimization platform and fintech modules.
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