Correlation Between Visa and UMH Properties
Can any of the company-specific risk be diversified away by investing in both Visa 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 Visa and UMH Properties into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Visa Class A and UMH Properties, you can compare the effects of market volatilities on Visa 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 Visa with a short position of UMH Properties. Check out your portfolio center. Please also check ongoing floating volatility patterns of Visa and UMH Properties.
Diversification Opportunities for Visa and UMH Properties
0.01 | Correlation Coefficient |
Significant diversification
The 3 months correlation between Visa and UMH is 0.01. Overlapping area represents the amount of risk that can be diversified away by holding Visa Class A and UMH Properties in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on UMH Properties and Visa 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 Visa Class A 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 Visa i.e., Visa and UMH Properties go up and down completely randomly.
Pair Corralation between Visa and UMH Properties
Taking into account the 90-day investment horizon Visa Class A is expected to generate 0.48 times more return on investment than UMH Properties. However, Visa Class A is 2.1 times less risky than UMH Properties. It trades about 0.16 of its potential returns per unit of risk. UMH Properties is currently generating about 0.05 per unit of risk. If you would invest 27,801 in Visa Class A on August 31, 2024 and sell it today you would earn a total of 3,669 from holding Visa Class A or generate 13.2% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 73.02% |
| Values | Daily Returns |
Visa Class A vs. UMH Properties
Performance |
| Timeline |
| Visa Class A |
| UMH Properties |
Visa and UMH Properties Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Visa and UMH Properties
The main advantage of trading using opposite Visa and UMH Properties positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Visa 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.| Visa vs. American Express | Visa vs. PayPal Holdings | Visa vs. Capital One Financial | Visa vs. Upstart Holdings |
| UMH Properties vs. ICL Israel Chemicals | UMH Properties vs. Clal Insurance Enterprises | UMH Properties vs. Migdal Insurance | UMH Properties vs. Israel Discount Bank |
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 Stock Tickers module to use high-impact, comprehensive, and customizable stock tickers that can be easily integrated to any websites.
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