Correlation Between Crombie Real and Modiv

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

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

Diversification Opportunities for Crombie Real and Modiv

0.58

Correlation Coefficient

Crombie Real  Modiv

Very weak diversification

The 3 months correlation between Crombie and Modiv is 0.58. Overlapping area represents the amount of risk that can be diversified away by holding Crombie Real Estate and Modiv Inc in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Modiv Inc and Crombie Real 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 Crombie Real Estate 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 Crombie Real i.e., Crombie Real and Modiv go up and down completely randomly.

Pair Corralation between Crombie Real and Modiv

Assuming the 90 days horizon Crombie Real is expected to generate 1.19 times less return on investment than Modiv. But when comparing it to its historical volatility, Crombie Real Estate is 2.32 times less risky than Modiv. It trades about 0.14 of its potential returns per unit of risk. Modiv Inc is currently generating about 0.07 of returns per unit of risk over similar time horizon. If you would invest  1,466  in Modiv Inc on December 27, 2024 and sell it today you would earn a total of  120.00  from holding Modiv Inc or generate 8.19% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Weak
Accuracy	90.16%
Values	Daily Returns

Crombie Real Estate  vs.  Modiv Inc

Crombie Real Estate

Risk-Adjusted Performance

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Crombie Real Estate are ranked lower than 11 (%) of all global equities and portfolios over the last 90 days. Despite nearly abnormal primary indicators, Crombie Real may actually be approaching a critical reversion point that can send shares even higher in April 2025.

Modiv Inc

Risk-Adjusted Performance

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in Modiv Inc are ranked lower than 5 (%) 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 April 2025.

Pair Trading with Crombie Real and Modiv

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

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 Earnings Calls module to check upcoming earnings announcements updated hourly across public exchanges.