Correlation Between Intergroup and Modiv

Can any of the company-specific risk be diversified away by investing in both Intergroup 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 Intergroup and Modiv into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between The Intergroup and Modiv Inc, you can compare the effects of market volatilities on Intergroup 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 Intergroup with a short position of Modiv. Check out your portfolio center. Please also check ongoing floating volatility patterns of Intergroup and Modiv.

Diversification Opportunities for Intergroup and Modiv

-0.71

Correlation Coefficient

Intergroup  Modiv

Pay attention - limited upside

The 3 months correlation between Intergroup and Modiv is -0.71. Overlapping area represents the amount of risk that can be diversified away by holding The Intergroup and Modiv Inc in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Modiv Inc and Intergroup 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 The Intergroup 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 Intergroup i.e., Intergroup and Modiv go up and down completely randomly.

Pair Corralation between Intergroup and Modiv

Given the investment horizon of 90 days The Intergroup is expected to under-perform the Modiv. In addition to that, Intergroup is 1.72 times more volatile than Modiv Inc. It trades about -0.07 of its total potential returns per unit of risk. Modiv Inc is currently generating about 0.08 per unit of volatility. If you would invest  1,447  in Modiv Inc on August 2, 2024 and sell it today you would earn a total of  267.00  from holding Modiv Inc or generate 18.45% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Weak
Accuracy	100.0%
Values	Daily Returns

The Intergroup  vs.  Modiv Inc

Intergroup

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days The Intergroup has generated negative risk-adjusted returns adding no value to investors with long positions. Despite uncertain performance in the last few months, the Stock's basic indicators remain nearly stable which may send shares a bit higher in December 2024. The current disturbance may also be a sign of long-run up-swing for the company stockholders.

Modiv Inc

Risk-Adjusted Performance

10 of 100

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Modiv Inc are ranked lower than 10 (%) of all global equities and portfolios over the last 90 days. In spite of fairly fragile fundamental indicators, Modiv showed solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Intergroup and Modiv

The main advantage of trading using opposite Intergroup and Modiv positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Intergroup 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.

The idea behind The Intergroup and Modiv Inc pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.

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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 Analysis module to research over 250,000 global equities including funds, stocks and ETFs to find investment opportunities.