Correlation Between InterRent Real and UMH Properties

Can any of the company-specific risk be diversified away by investing in both InterRent Real 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 InterRent Real and UMH Properties into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between InterRent Real Estate and UMH Properties, you can compare the effects of market volatilities on InterRent Real 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 InterRent Real with a short position of UMH Properties. Check out your portfolio center. Please also check ongoing floating volatility patterns of InterRent Real and UMH Properties.

Diversification Opportunities for InterRent Real and UMH Properties

0.45

Correlation Coefficient

InterRent Real  UMH Properties

Very weak diversification

The 3 months correlation between InterRent and UMH is 0.45. Overlapping area represents the amount of risk that can be diversified away by holding InterRent Real Estate and UMH Properties in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on UMH Properties and InterRent Real 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 InterRent Real Estate 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 InterRent Real i.e., InterRent Real and UMH Properties go up and down completely randomly.

Pair Corralation between InterRent Real and UMH Properties

Assuming the 90 days horizon InterRent Real Estate is expected to generate 3.54 times more return on investment than UMH Properties. However, InterRent Real is 3.54 times more volatile than UMH Properties. It trades about 0.11 of its potential returns per unit of risk. UMH Properties is currently generating about 0.02 per unit of risk. If you would invest  711.00  in InterRent Real Estate on December 22, 2024 and sell it today you would earn a total of  57.00  from holding InterRent Real Estate or generate 8.02% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Weak
Accuracy	66.67%
Values	Daily Returns

InterRent Real Estate  vs.  UMH Properties

InterRent Real Estate

Risk-Adjusted Performance

OK

Compared to the overall equity markets, risk-adjusted returns on investments in InterRent Real Estate are ranked lower than 8 (%) of all global equities and portfolios over the last 90 days. Despite nearly uncertain basic indicators, InterRent Real reported solid returns over the last few months and may actually be approaching a breakup point.

UMH Properties

Risk-Adjusted Performance

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in UMH Properties are ranked lower than 1 (%) of all global equities and portfolios over the last 90 days. In spite of rather sound technical indicators, UMH Properties is not utilizing all of its potentials. The current stock price tumult, may contribute to shorter-term losses for the shareholders.

Pair Trading with InterRent Real and UMH Properties

The main advantage of trading using opposite InterRent Real and UMH Properties positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if InterRent Real 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.

The idea behind InterRent Real Estate and UMH Properties pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.

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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 Money Managers module to screen money managers from public funds and ETFs managed around the world.