Correlation Between Modiv and First Real

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

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

Diversification Opportunities for Modiv and First Real

0.16

Correlation Coefficient

Modiv  First Real

Average diversification

The 3 months correlation between Modiv and First is 0.16. Overlapping area represents the amount of risk that can be diversified away by holding Modiv Inc and First Real Estate in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on First Real Estate and Modiv 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 Modiv Inc are associated (or correlated) with First Real. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of First Real Estate has no effect on the direction of Modiv i.e., Modiv and First Real go up and down completely randomly.

Pair Corralation between Modiv and First Real

Considering the 90-day investment horizon Modiv Inc is expected to generate 0.58 times more return on investment than First Real. However, Modiv Inc is 1.73 times less risky than First Real. It trades about 0.05 of its potential returns per unit of risk. First Real Estate is currently generating about 0.02 per unit of risk. If you would invest  1,288  in Modiv Inc on September 14, 2024 and sell it today you would earn a total of  298.00  from holding Modiv Inc or generate 23.14% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Insignificant
Accuracy	82.16%
Values	Daily Returns

Modiv Inc  vs.  First Real Estate

Modiv Inc

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Modiv Inc has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of fairly stable fundamental indicators, Modiv is not utilizing all of its potentials. The newest stock price fuss, may contribute to near-short-term losses for the sophisticated investors.

First Real Estate

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days First Real Estate has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of comparatively stable basic indicators, First Real is not utilizing all of its potentials. The latest stock price uproar, may contribute to short-horizon losses for the private investors.

Pair Trading with Modiv and First Real

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

The idea behind Modiv Inc and First 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 Pattern Recognition module to use different Pattern Recognition models to time the market across multiple global exchanges.