Correlation Between Modiv and Intergroup

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

By analyzing existing cross correlation between Modiv Inc and The Intergroup, you can compare the effects of market volatilities on Modiv and Intergroup 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 Intergroup. Check out your portfolio center. Please also check ongoing floating volatility patterns of Modiv and Intergroup.

Diversification Opportunities for Modiv and Intergroup

-0.43

Correlation Coefficient

Modiv  Intergroup

Very good diversification

The 3 months correlation between Modiv and Intergroup is -0.43. Overlapping area represents the amount of risk that can be diversified away by holding Modiv Inc and The Intergroup in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Intergroup 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 Intergroup. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Intergroup has no effect on the direction of Modiv i.e., Modiv and Intergroup go up and down completely randomly.

Pair Corralation between Modiv and Intergroup

Considering the 90-day investment horizon Modiv Inc is expected to generate 0.63 times more return on investment than Intergroup. However, Modiv Inc is 1.59 times less risky than Intergroup. It trades about -0.01 of its potential returns per unit of risk. The Intergroup is currently generating about -0.12 per unit of risk. If you would invest  1,645  in Modiv Inc on August 30, 2024 and sell it today you would lose (45.00) from holding Modiv Inc or give up 2.74% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Very Weak
Accuracy	98.44%
Values	Daily Returns

Modiv Inc  vs.  The Intergroup

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 current stock price fuss, may contribute to near-short-term losses for the sophisticated investors.

Intergroup

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days The Intergroup has generated negative risk-adjusted returns adding no value to investors with long positions. Despite uncertain performance in the last few months, the Stock's basic indicators remain nearly stable which may send shares a bit higher in December 2024. The current disturbance may also be a sign of long-run up-swing for the company stockholders.

Pair Trading with Modiv and Intergroup

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

The idea behind Modiv Inc and The Intergroup 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 Alpha Finder module to use alpha and beta coefficients to find investment opportunities after accounting for the risk.