Correlation Between American Assets and Modiv
Can any of the company-specific risk be diversified away by investing in both American Assets and Modiv 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 American Assets and Modiv into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between American Assets Trust and Modiv Inc, you can compare the effects of market volatilities on American Assets and Modiv 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 American Assets with a short position of Modiv. Check out your portfolio center. Please also check ongoing floating volatility patterns of American Assets and Modiv.
Diversification Opportunities for American Assets and Modiv
0.53 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between American and Modiv is 0.53. Overlapping area represents the amount of risk that can be diversified away by holding American Assets Trust and Modiv Inc in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Modiv Inc and American Assets 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 American Assets Trust are associated (or correlated) with Modiv. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Modiv Inc has no effect on the direction of American Assets i.e., American Assets and Modiv go up and down completely randomly.
Pair Corralation between American Assets and Modiv
Considering the 90-day investment horizon American Assets Trust is expected to generate 2.28 times more return on investment than Modiv. However, American Assets is 2.28 times more volatile than Modiv Inc. It trades about 0.16 of its potential returns per unit of risk. Modiv Inc is currently generating about -0.2 per unit of risk. If you would invest 2,734 in American Assets Trust on August 30, 2024 and sell it today you would earn a total of 127.00 from holding American Assets Trust or generate 4.65% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
American Assets Trust vs. Modiv Inc
Performance |
| Timeline |
| American Assets Trust |
| Modiv Inc |
American Assets and Modiv Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with American Assets and Modiv
The main advantage of trading using opposite American Assets and Modiv positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if American Assets position performs unexpectedly, Modiv 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 Modiv will offset losses from the drop in Modiv's long position.| American Assets vs. Essential Properties Realty | American Assets vs. Armada Hflr Pr | American Assets vs. CTO Realty Growth | American Assets vs. Brightspire Capital |
| Modiv vs. SiriusPoint | Modiv vs. RLJ Lodging Trust | Modiv vs. ARMOUR Residential REIT | Modiv vs. Sachem Capital Corp |
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 Companies Directory module to evaluate performance of over 100,000 Stocks, Funds, and ETFs against different fundamentals.
Other Complementary Tools
| Transaction History View history of all your transactions and understand their impact on performance | |
| Money Managers Screen money managers from public funds and ETFs managed around the world | |
| Instant Ratings Determine any equity ratings based on digital recommendations. Macroaxis instant equity ratings are based on combination of fundamental analysis and risk-adjusted market performance | |
| Idea Analyzer Analyze all characteristics, volatility and risk-adjusted return of Macroaxis ideas | |
| USA ETFs Find actively traded Exchange Traded Funds (ETF) in USA |