Correlation Between Modiv and Land Securities

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

By analyzing existing cross correlation between Modiv Inc and Land Securities Group, you can compare the effects of market volatilities on Modiv and Land Securities 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 Land Securities. Check out your portfolio center. Please also check ongoing floating volatility patterns of Modiv and Land Securities.

Diversification Opportunities for Modiv and Land Securities

0.24

Correlation Coefficient

Modiv  Land Securities

Modest diversification

The 3 months correlation between Modiv and Land is 0.24. Overlapping area represents the amount of risk that can be diversified away by holding Modiv Inc and Land Securities Group in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Land Securities Group 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 Land Securities. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Land Securities Group has no effect on the direction of Modiv i.e., Modiv and Land Securities go up and down completely randomly.

Pair Corralation between Modiv and Land Securities

Assuming the 90 days trading horizon Modiv is expected to generate 1.25 times less return on investment than Land Securities. But when comparing it to its historical volatility, Modiv Inc is 2.63 times less risky than Land Securities. It trades about 0.04 of its potential returns per unit of risk. Land Securities Group is currently generating about 0.02 of returns per unit of risk over similar time horizon. If you would invest  734.00  in Land Securities Group on October 10, 2024 and sell it today you would lose (26.00) from holding Land Securities Group or give up 3.54% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Very Weak
Accuracy	76.06%
Values	Daily Returns

Modiv Inc  vs.  Land Securities Group

Modiv Inc

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Modiv Inc has generated negative risk-adjusted returns adding no value to investors with long positions. Despite somewhat strong basic indicators, Modiv is not utilizing all of its potentials. The recent stock price disturbance, may contribute to short-term losses for the investors.

Land Securities Group

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Land Securities Group has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of latest unfluctuating performance, the Stock's fundamental indicators remain strong and the current disturbance on Wall Street may also be a sign of long term gains for the company investors.

Pair Trading with Modiv and Land Securities

The main advantage of trading using opposite Modiv and Land Securities positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Modiv position performs unexpectedly, Land Securities 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 Land Securities will offset losses from the drop in Land Securities' long position.

The idea behind Modiv Inc and Land Securities Group 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 FinTech Suite module to use AI to screen and filter profitable investment opportunities.