Correlation Between Modiv and Safehold
Can any of the company-specific risk be diversified away by investing in both Modiv and Safehold 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 Safehold into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Modiv Inc and Safehold, you can compare the effects of market volatilities on Modiv and Safehold 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 Safehold. Check out your portfolio center. Please also check ongoing floating volatility patterns of Modiv and Safehold.
Diversification Opportunities for Modiv and Safehold
Good diversification
The 3 months correlation between Modiv and Safehold is -0.1. Overlapping area represents the amount of risk that can be diversified away by holding Modiv Inc and Safehold in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Safehold 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 Safehold. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Safehold has no effect on the direction of Modiv i.e., Modiv and Safehold go up and down completely randomly.
Pair Corralation between Modiv and Safehold
Considering the 90-day investment horizon Modiv Inc is expected to generate 0.59 times more return on investment than Safehold. However, Modiv Inc is 1.7 times less risky than Safehold. It trades about -0.23 of its potential returns per unit of risk. Safehold is currently generating about -0.27 per unit of risk. If you would invest 1,742 in Modiv Inc on August 27, 2024 and sell it today you would lose (101.00) from holding Modiv Inc or give up 5.8% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Modiv Inc vs. Safehold
Performance |
| Timeline |
| Modiv Inc |
| Safehold |
Modiv and Safehold Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Modiv and Safehold
The main advantage of trading using opposite Modiv and Safehold positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Modiv position performs unexpectedly, Safehold 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 Safehold will offset losses from the drop in Safehold's long position.| Modiv vs. Investcorp Credit Management | Modiv vs. Medalist Diversified Reit | Modiv vs. Aquagold International | Modiv vs. Morningstar Unconstrained Allocation |
| Safehold vs. Essential Properties Realty | Safehold vs. Broadstone Net Lease | Safehold vs. Armada Hflr Pr | Safehold vs. CTO Realty Growth |
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 Sectors module to list of equity sectors categorizing publicly traded companies based on their primary business activities.
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