Correlation Between W P and Modiv
Can any of the company-specific risk be diversified away by investing in both W P 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 W P and Modiv into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between W P Carey and Modiv Inc, you can compare the effects of market volatilities on W P 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 W P with a short position of Modiv. Check out your portfolio center. Please also check ongoing floating volatility patterns of W P and Modiv.
Diversification Opportunities for W P and Modiv
Very good diversification
The 3 months correlation between WPC and Modiv is -0.46. Overlapping area represents the amount of risk that can be diversified away by holding W P Carey and Modiv Inc in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Modiv Inc and W P 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 W P Carey 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 W P i.e., W P and Modiv go up and down completely randomly.
Pair Corralation between W P and Modiv
Considering the 90-day investment horizon W P Carey is expected to generate 1.61 times more return on investment than Modiv. However, W P is 1.61 times more volatile than Modiv Inc. It trades about 0.07 of its potential returns per unit of risk. Modiv Inc is currently generating about -0.2 per unit of risk. If you would invest 5,670 in W P Carey on August 30, 2024 and sell it today you would earn a total of 81.00 from holding W P Carey or generate 1.43% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
W P Carey vs. Modiv Inc
Performance |
| Timeline |
| W P Carey |
| Modiv Inc |
W P and Modiv Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with W P and Modiv
The main advantage of trading using opposite W P and Modiv positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if W P 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.| W P vs. STAG Industrial | W P vs. National Retail Properties | W P vs. Medical Properties Trust | W P vs. Omega Healthcare Investors |
| 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 Portfolio Dashboard module to portfolio dashboard that provides centralized access to all your investments.
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