Correlation Between UMH Properties and Mid America
Can any of the company-specific risk be diversified away by investing in both UMH Properties and Mid America 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 Mid America into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between UMH Properties and Mid America Apartment Communities, you can compare the effects of market volatilities on UMH Properties and Mid America 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 Mid America. Check out your portfolio center. Please also check ongoing floating volatility patterns of UMH Properties and Mid America.
Diversification Opportunities for UMH Properties and Mid America
0.9 | Correlation Coefficient |
Almost no diversification
The 3 months correlation between UMH and Mid is 0.9. Overlapping area represents the amount of risk that can be diversified away by holding UMH Properties and Mid America Apartment Communit in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Mid America Apartment 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 Mid America. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Mid America Apartment has no effect on the direction of UMH Properties i.e., UMH Properties and Mid America go up and down completely randomly.
Pair Corralation between UMH Properties and Mid America
Considering the 90-day investment horizon UMH Properties is expected to generate 3.24 times less return on investment than Mid America. In addition to that, UMH Properties is 1.09 times more volatile than Mid America Apartment Communities. It trades about 0.09 of its total potential returns per unit of risk. Mid America Apartment Communities is currently generating about 0.32 per unit of volatility. If you would invest 15,215 in Mid America Apartment Communities on August 31, 2024 and sell it today you would earn a total of 1,305 from holding Mid America Apartment Communities or generate 8.58% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
UMH Properties vs. Mid America Apartment Communit
Performance |
| Timeline |
| UMH Properties |
| Mid America Apartment |
UMH Properties and Mid America Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with UMH Properties and Mid America
The main advantage of trading using opposite UMH Properties and Mid America positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if UMH Properties position performs unexpectedly, Mid America 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 Mid America will offset losses from the drop in Mid America's long position.| UMH Properties vs. Apartment Investment and | UMH Properties vs. Clipper Realty | UMH Properties vs. BRT Realty Trust | UMH Properties vs. UDR Inc |
| Mid America vs. AvalonBay Communities | Mid America vs. Essex Property Trust | Mid America vs. Equity Residential | Mid America vs. UDR Inc |
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 Risk-Return Analysis module to view associations between returns expected from investment and the risk you assume.
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