Correlation Between UMH Properties and Equity Lifestyle
Can any of the company-specific risk be diversified away by investing in both UMH Properties and Equity Lifestyle 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 Equity Lifestyle into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between UMH Properties and Equity Lifestyle Properties, you can compare the effects of market volatilities on UMH Properties and Equity Lifestyle 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 Equity Lifestyle. Check out your portfolio center. Please also check ongoing floating volatility patterns of UMH Properties and Equity Lifestyle.
Diversification Opportunities for UMH Properties and Equity Lifestyle
0.84 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between UMH and Equity is 0.84. Overlapping area represents the amount of risk that can be diversified away by holding UMH Properties and Equity Lifestyle Properties in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Equity Lifestyle Pro 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 Equity Lifestyle. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Equity Lifestyle Pro has no effect on the direction of UMH Properties i.e., UMH Properties and Equity Lifestyle go up and down completely randomly.
Pair Corralation between UMH Properties and Equity Lifestyle
Considering the 90-day investment horizon UMH Properties is expected to generate 1.15 times more return on investment than Equity Lifestyle. However, UMH Properties is 1.15 times more volatile than Equity Lifestyle Properties. It trades about 0.04 of its potential returns per unit of risk. Equity Lifestyle Properties is currently generating about 0.03 per unit of risk. If you would invest 1,534 in UMH Properties on August 28, 2024 and sell it today you would earn a total of 405.00 from holding UMH Properties or generate 26.4% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
UMH Properties vs. Equity Lifestyle Properties
Performance |
| Timeline |
| UMH Properties |
| Equity Lifestyle Pro |
UMH Properties and Equity Lifestyle Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with UMH Properties and Equity Lifestyle
The main advantage of trading using opposite UMH Properties and Equity Lifestyle positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if UMH Properties position performs unexpectedly, Equity Lifestyle 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 Equity Lifestyle will offset losses from the drop in Equity Lifestyle's long position.| UMH Properties vs. Sun Communities | UMH Properties vs. Clipper Realty | UMH Properties vs. UDR Inc | UMH Properties vs. American Homes 4 |
| Equity Lifestyle vs. UMH Properties | Equity Lifestyle vs. UDR Inc | Equity Lifestyle vs. AvalonBay Communities | Equity Lifestyle 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 Alpha Finder module to use alpha and beta coefficients to find investment opportunities after accounting for the risk.
Other Complementary Tools
| Portfolio Volatility Check portfolio volatility and analyze historical return density to properly model market risk | |
| Idea Breakdown Analyze constituents of all Macroaxis ideas. Macroaxis investment ideas are predefined, sector-focused investing themes | |
| Price Exposure Probability Analyze equity upside and downside potential for a given time horizon across multiple markets | |
| Portfolio Rebalancing Analyze risk-adjusted returns against different time horizons to find asset-allocation targets | |
| Price Ceiling Movement Calculate and plot Price Ceiling Movement for different equity instruments |