Correlation Between Modiv and Goodman
Can any of the company-specific risk be diversified away by investing in both Modiv and Goodman 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 Goodman into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Modiv Inc and Goodman Group, you can compare the effects of market volatilities on Modiv and Goodman 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 Goodman. Check out your portfolio center. Please also check ongoing floating volatility patterns of Modiv and Goodman.
Diversification Opportunities for Modiv and Goodman
Average diversification
The 3 months correlation between Modiv and Goodman is 0.17. Overlapping area represents the amount of risk that can be diversified away by holding Modiv Inc and Goodman Group in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Goodman Group 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 Goodman. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Goodman Group has no effect on the direction of Modiv i.e., Modiv and Goodman go up and down completely randomly.
Pair Corralation between Modiv and Goodman
Assuming the 90 days trading horizon Modiv Inc is expected to generate 0.3 times more return on investment than Goodman. However, Modiv Inc is 3.39 times less risky than Goodman. It trades about -0.11 of its potential returns per unit of risk. Goodman Group is currently generating about -0.32 per unit of risk. If you would invest 2,390 in Modiv Inc on November 28, 2024 and sell it today you would lose (22.00) from holding Modiv Inc or give up 0.92% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Modiv Inc vs. Goodman Group
Performance |
| Timeline |
| Modiv Inc |
| Goodman Group |
Modiv and Goodman Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Modiv and Goodman
The main advantage of trading using opposite Modiv and Goodman positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Modiv position performs unexpectedly, Goodman 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 Goodman will offset losses from the drop in Goodman's long position.| Modiv vs. SiriusPoint | Modiv vs. RLJ Lodging Trust | Modiv vs. ARMOUR Residential REIT | Modiv vs. Sachem Capital Corp |
| Goodman vs. Comstock Holding Companies | Goodman vs. St Joe Company | Goodman vs. Stratus Properties | Goodman vs. Mitsui Fudosan Co |
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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