Correlation Between CTO Realty and Modiv
Can any of the company-specific risk be diversified away by investing in both CTO Realty 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 CTO Realty and Modiv into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between CTO Realty Growth and Modiv Inc, you can compare the effects of market volatilities on CTO Realty 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 CTO Realty with a short position of Modiv. Check out your portfolio center. Please also check ongoing floating volatility patterns of CTO Realty and Modiv.
Diversification Opportunities for CTO Realty and Modiv
0.48 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between CTO and Modiv is 0.48. Overlapping area represents the amount of risk that can be diversified away by holding CTO Realty Growth and Modiv Inc in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Modiv Inc and CTO Realty 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 CTO Realty Growth 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 CTO Realty i.e., CTO Realty and Modiv go up and down completely randomly.
Pair Corralation between CTO Realty and Modiv
Considering the 90-day investment horizon CTO Realty Growth is expected to generate 2.24 times more return on investment than Modiv. However, CTO Realty is 2.24 times more volatile than Modiv Inc. It trades about 0.05 of its potential returns per unit of risk. Modiv Inc is currently generating about -0.01 per unit of risk. If you would invest 1,956 in CTO Realty Growth on August 26, 2024 and sell it today you would earn a total of 25.00 from holding CTO Realty Growth or generate 1.28% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
CTO Realty Growth vs. Modiv Inc
Performance |
| Timeline |
| CTO Realty Growth |
| Modiv Inc |
CTO Realty and Modiv Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with CTO Realty and Modiv
The main advantage of trading using opposite CTO Realty and Modiv positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if CTO Realty 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.| CTO Realty vs. Essential Properties Realty | CTO Realty vs. Armada Hflr Pr | CTO Realty vs. Brightspire Capital | CTO Realty vs. Broadstone Net Lease |
| 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 Positions Ratings module to determine portfolio positions ratings based on digital equity recommendations. Macroaxis instant position ratings are based on combination of fundamental analysis and risk-adjusted market performance.
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