Correlation Between HR Real and Modiv
Can any of the company-specific risk be diversified away by investing in both HR Real 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 HR Real and Modiv into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between HR Real Estate and Modiv Inc, you can compare the effects of market volatilities on HR Real 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 HR Real with a short position of Modiv. Check out your portfolio center. Please also check ongoing floating volatility patterns of HR Real and Modiv.
Diversification Opportunities for HR Real and Modiv
Poor diversification
The 3 months correlation between HRUFF and Modiv is 0.68. Overlapping area represents the amount of risk that can be diversified away by holding HR Real Estate and Modiv Inc in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Modiv Inc and HR Real 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 HR Real Estate 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 HR Real i.e., HR Real and Modiv go up and down completely randomly.
Pair Corralation between HR Real and Modiv
Assuming the 90 days horizon HR Real Estate is expected to generate 1.28 times more return on investment than Modiv. However, HR Real is 1.28 times more volatile than Modiv Inc. It trades about 0.19 of its potential returns per unit of risk. Modiv Inc is currently generating about 0.13 per unit of risk. If you would invest 636.00 in HR Real Estate on December 4, 2024 and sell it today you would earn a total of 62.00 from holding HR Real Estate or generate 9.75% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
HR Real Estate vs. Modiv Inc
Performance |
| Timeline |
| HR Real Estate |
| Modiv Inc |
HR Real and Modiv Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with HR Real and Modiv
The main advantage of trading using opposite HR Real and Modiv positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if HR Real 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.| HR Real vs. Generationome Properties | HR Real vs. Modiv Inc | HR Real vs. Broadstone Net Lease | HR Real vs. Gladstone Commercial |
| Modiv vs. Presidio Property Trust | Modiv vs. Medalist Diversified Reit | Modiv vs. Gladstone Commercial | Modiv vs. Gladstone Commercial 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 Price Exposure Probability module to analyze equity upside and downside potential for a given time horizon across multiple markets.
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