Correlation Between Modiv and Armada Hflr
Can any of the company-specific risk be diversified away by investing in both Modiv and Armada Hflr 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 Modiv and Armada Hflr into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Modiv Inc and Armada Hflr Pr, you can compare the effects of market volatilities on Modiv and Armada Hflr 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 Modiv with a short position of Armada Hflr. Check out your portfolio center. Please also check ongoing floating volatility patterns of Modiv and Armada Hflr.
Diversification Opportunities for Modiv and Armada Hflr
0.5 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Modiv and Armada is 0.5. Overlapping area represents the amount of risk that can be diversified away by holding Modiv Inc and Armada Hflr Pr in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Armada Hflr Pr and Modiv 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 Modiv Inc are associated (or correlated) with Armada Hflr. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Armada Hflr Pr has no effect on the direction of Modiv i.e., Modiv and Armada Hflr go up and down completely randomly.
Pair Corralation between Modiv and Armada Hflr
Assuming the 90 days trading horizon Modiv Inc is expected to generate 0.33 times more return on investment than Armada Hflr. However, Modiv Inc is 2.99 times less risky than Armada Hflr. It trades about -0.16 of its potential returns per unit of risk. Armada Hflr Pr is currently generating about -0.09 per unit of risk. If you would invest 2,400 in Modiv Inc on November 18, 2024 and sell it today you would lose (38.00) from holding Modiv Inc or give up 1.58% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Modiv Inc vs. Armada Hflr Pr
Performance |
| Timeline |
| Modiv Inc |
| Armada Hflr Pr |
Modiv and Armada Hflr Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Modiv and Armada Hflr
The main advantage of trading using opposite Modiv and Armada Hflr positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Modiv position performs unexpectedly, Armada Hflr 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 Armada Hflr will offset losses from the drop in Armada Hflr's long position.| Modiv vs. SiriusPoint | Modiv vs. RLJ Lodging Trust | Modiv vs. ARMOUR Residential REIT | Modiv vs. Sachem Capital Corp |
| Armada Hflr vs. Modiv Inc | Armada Hflr vs. Precinct Properties New | Armada Hflr vs. Global Net Lease | Armada Hflr vs. NexPoint Diversified Real |
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 Equity Forecasting module to use basic forecasting models to generate price predictions and determine price momentum.
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