Correlation Between Bluerock Homes and Modiv
Can any of the company-specific risk be diversified away by investing in both Bluerock Homes 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 Bluerock Homes and Modiv into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Bluerock Homes Trust and Modiv Inc, you can compare the effects of market volatilities on Bluerock Homes 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 Bluerock Homes with a short position of Modiv. Check out your portfolio center. Please also check ongoing floating volatility patterns of Bluerock Homes and Modiv.
Diversification Opportunities for Bluerock Homes and Modiv
-0.22 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Bluerock and Modiv is -0.22. Overlapping area represents the amount of risk that can be diversified away by holding Bluerock Homes Trust and Modiv Inc in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Modiv Inc and Bluerock Homes 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 Bluerock Homes 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 Bluerock Homes i.e., Bluerock Homes and Modiv go up and down completely randomly.
Pair Corralation between Bluerock Homes and Modiv
Considering the 90-day investment horizon Bluerock Homes Trust is expected to under-perform the Modiv. But the stock apears to be less risky and, when comparing its historical volatility, Bluerock Homes Trust is 1.01 times less risky than Modiv. The stock trades about -0.03 of its potential returns per unit of risk. The Modiv Inc is currently generating about 0.05 of returns per unit of risk over similar time horizon. If you would invest 1,051 in Modiv Inc on August 27, 2024 and sell it today you would earn a total of 590.00 from holding Modiv Inc or generate 56.14% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Bluerock Homes Trust vs. Modiv Inc
Performance |
| Timeline |
| Bluerock Homes Trust |
| Modiv Inc |
Bluerock Homes and Modiv Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Bluerock Homes and Modiv
The main advantage of trading using opposite Bluerock Homes and Modiv positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Bluerock Homes 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.| Bluerock Homes vs. Nexpoint Residential Trust | Bluerock Homes vs. Clipper Realty | Bluerock Homes vs. Centerspace | Bluerock Homes vs. Equity Lifestyle Properties |
| Modiv vs. Investcorp Credit Management | Modiv vs. Medalist Diversified Reit | Modiv vs. Aquagold International | Modiv vs. Morningstar Unconstrained Allocation |
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 Correlation Analysis module to reduce portfolio risk simply by holding instruments which are not perfectly correlated.
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