Correlation Between UMH Properties and BSR Real

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

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

Diversification Opportunities for UMH Properties and BSR Real

0.25

Correlation Coefficient

UMH Properties  BSR Real

Modest diversification

The 3 months correlation between UMH and BSR is 0.25. Overlapping area represents the amount of risk that can be diversified away by holding UMH Properties and BSR Real Estate in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on BSR Real Estate 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 BSR Real. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of BSR Real Estate has no effect on the direction of UMH Properties i.e., UMH Properties and BSR Real go up and down completely randomly.

Pair Corralation between UMH Properties and BSR Real

Assuming the 90 days trading horizon UMH Properties is expected to generate 0.31 times more return on investment than BSR Real. However, UMH Properties is 3.25 times less risky than BSR Real. It trades about 0.02 of its potential returns per unit of risk. BSR Real Estate is currently generating about 0.0 per unit of risk. If you would invest  2,235  in UMH Properties on December 19, 2024 and sell it today you would earn a total of  14.00  from holding UMH Properties or generate 0.63% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Very Weak
Accuracy	98.33%
Values	Daily Returns

UMH Properties  vs.  BSR Real Estate

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.

BSR Real Estate

Risk-Adjusted Performance

Very Weak

Over the last 90 days BSR Real Estate has generated negative risk-adjusted returns adding no value to investors with long positions. Despite nearly stable basic indicators, BSR Real is not utilizing all of its potentials. The current stock price disturbance, may contribute to mid-run losses for the stockholders.

Pair Trading with UMH Properties and BSR Real

The main advantage of trading using opposite UMH Properties and BSR Real positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if UMH Properties position performs unexpectedly, BSR Real 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 BSR Real will offset losses from the drop in BSR Real's long position.

The idea behind UMH Properties and BSR Real Estate 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 Portfolio Diagnostics module to use generated alerts and portfolio events aggregator to diagnose current holdings.