Correlation Between Global Net and Modiv
Can any of the company-specific risk be diversified away by investing in both Global Net 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 Global Net and Modiv into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Global Net Lease and Modiv Inc, you can compare the effects of market volatilities on Global Net 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 Global Net with a short position of Modiv. Check out your portfolio center. Please also check ongoing floating volatility patterns of Global Net and Modiv.
Diversification Opportunities for Global Net and Modiv
0.45 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Global and Modiv is 0.45. Overlapping area represents the amount of risk that can be diversified away by holding Global Net Lease and Modiv Inc in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Modiv Inc and Global Net 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 Global Net Lease 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 Global Net i.e., Global Net and Modiv go up and down completely randomly.
Pair Corralation between Global Net and Modiv
Assuming the 90 days trading horizon Global Net Lease is expected to under-perform the Modiv. In addition to that, Global Net is 1.7 times more volatile than Modiv Inc. It trades about -0.08 of its total potential returns per unit of risk. Modiv Inc is currently generating about -0.02 per unit of volatility. If you would invest 2,428 in Modiv Inc on October 26, 2024 and sell it today you would lose (28.00) from holding Modiv Inc or give up 1.15% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Global Net Lease vs. Modiv Inc
Performance |
| Timeline |
| Global Net Lease |
| Modiv Inc |
Global Net and Modiv Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Global Net and Modiv
The main advantage of trading using opposite Global Net and Modiv positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Global Net 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.| Global Net vs. Global Net Lease | Global Net vs. Global Medical REIT | Global Net vs. City Office REIT | Global Net vs. ARMOUR Residential REIT |
| 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 Idea Analyzer module to analyze all characteristics, volatility and risk-adjusted return of Macroaxis ideas.
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