Correlation Between Modiv and Tejon Ranch

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Can any of the company-specific risk be diversified away by investing in both Modiv and Tejon Ranch 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 Tejon Ranch into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Modiv Inc and Tejon Ranch Co, you can compare the effects of market volatilities on Modiv and Tejon Ranch 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 Tejon Ranch. Check out your portfolio center. Please also check ongoing floating volatility patterns of Modiv and Tejon Ranch.

Diversification Opportunities for Modiv and Tejon Ranch

0.43
  Correlation Coefficient

Very weak diversification

The 3 months correlation between Modiv and Tejon is 0.43. Overlapping area represents the amount of risk that can be diversified away by holding Modiv Inc and Tejon Ranch Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Tejon Ranch 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 Tejon Ranch. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Tejon Ranch has no effect on the direction of Modiv i.e., Modiv and Tejon Ranch go up and down completely randomly.

Pair Corralation between Modiv and Tejon Ranch

Considering the 90-day investment horizon Modiv Inc is expected to generate 0.75 times more return on investment than Tejon Ranch. However, Modiv Inc is 1.34 times less risky than Tejon Ranch. It trades about 0.11 of its potential returns per unit of risk. Tejon Ranch Co is currently generating about 0.06 per unit of risk. If you would invest  1,387  in Modiv Inc on May 23, 2025 and sell it today you would earn a total of  122.00  from holding Modiv Inc or generate 8.8% return on investment over 90 days.
Time Period3 Months [change]
DirectionMoves Together 
StrengthWeak
Accuracy100.0%
ValuesDaily Returns

Modiv Inc  vs.  Tejon Ranch Co

 Performance 
       Timeline  
Modiv Inc 

Risk-Adjusted Performance

Fair

 
Weak
 
Strong
Compared to the overall equity markets, risk-adjusted returns on investments in Modiv Inc are ranked lower than 8 (%) of all global equities and portfolios over the last 90 days. In spite of fairly weak fundamental indicators, Modiv may actually be approaching a critical reversion point that can send shares even higher in September 2025.
Tejon Ranch 

Risk-Adjusted Performance

Soft

 
Weak
 
Strong
Compared to the overall equity markets, risk-adjusted returns on investments in Tejon Ranch Co are ranked lower than 4 (%) of all global equities and portfolios over the last 90 days. In spite of rather unfluctuating basic indicators, Tejon Ranch may actually be approaching a critical reversion point that can send shares even higher in September 2025.

Modiv and Tejon Ranch Volatility Contrast

   Predicted Return Density   
       Returns  

Pair Trading with Modiv and Tejon Ranch

The main advantage of trading using opposite Modiv and Tejon Ranch positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Modiv position performs unexpectedly, Tejon Ranch 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 Tejon Ranch will offset losses from the drop in Tejon Ranch's long position.
The idea behind Modiv Inc and Tejon Ranch Co 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 Global Markets Map module to get a quick overview of global market snapshot using zoomable world map. Drill down to check world indexes.

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