Correlation Between Sachem Capital and Modiv
Can any of the company-specific risk be diversified away by investing in both Sachem Capital 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 Sachem Capital and Modiv into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Sachem Capital Corp and Modiv Inc, you can compare the effects of market volatilities on Sachem Capital 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 Sachem Capital with a short position of Modiv. Check out your portfolio center. Please also check ongoing floating volatility patterns of Sachem Capital and Modiv.
Diversification Opportunities for Sachem Capital and Modiv
0.57 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Sachem and Modiv is 0.57. Overlapping area represents the amount of risk that can be diversified away by holding Sachem Capital Corp and Modiv Inc in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Modiv Inc and Sachem Capital 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 Sachem Capital Corp 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 Sachem Capital i.e., Sachem Capital and Modiv go up and down completely randomly.
Pair Corralation between Sachem Capital and Modiv
Assuming the 90 days trading horizon Sachem Capital is expected to generate 1.77 times less return on investment than Modiv. But when comparing it to its historical volatility, Sachem Capital Corp is 1.02 times less risky than Modiv. It trades about 0.03 of its potential returns per unit of risk. Modiv Inc is currently generating about 0.05 of returns per unit of risk over similar time horizon. If you would invest 1,810 in Modiv Inc on August 27, 2024 and sell it today you would earn a total of 660.00 from holding Modiv Inc or generate 36.46% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 99.8% |
| Values | Daily Returns |
Sachem Capital Corp vs. Modiv Inc
Performance |
| Timeline |
| Sachem Capital Corp |
| Modiv Inc |
Sachem Capital and Modiv Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Sachem Capital and Modiv
The main advantage of trading using opposite Sachem Capital and Modiv positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Sachem Capital 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.| Sachem Capital vs. SiriusPoint | Sachem Capital vs. Harrow Health 8625 | Sachem Capital vs. XOMA Corporation | Sachem Capital vs. New York Mortgage |
| 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 Premium Stories module to follow Macroaxis premium stories from verified contributors across different equity types, categories and coverage scope.
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