Correlation Between Modiv and Gaucho Group

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

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

Diversification Opportunities for Modiv and Gaucho Group

0.64

Correlation Coefficient

Modiv  Gaucho Group

Poor diversification

The 3 months correlation between Modiv and Gaucho is 0.64. Overlapping area represents the amount of risk that can be diversified away by holding Modiv Inc and Gaucho Group Holdings in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Gaucho Group Holdings 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 Gaucho Group. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Gaucho Group Holdings has no effect on the direction of Modiv i.e., Modiv and Gaucho Group go up and down completely randomly.

Pair Corralation between Modiv and Gaucho Group

Considering the 90-day investment horizon Modiv Inc is expected to generate 0.14 times more return on investment than Gaucho Group. However, Modiv Inc is 6.99 times less risky than Gaucho Group. It trades about 0.05 of its potential returns per unit of risk. Gaucho Group Holdings is currently generating about -0.02 per unit of risk. If you would invest  915.00  in Modiv Inc on September 29, 2024 and sell it today you would earn a total of  580.00  from holding Modiv Inc or generate 63.39% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Significant
Accuracy	95.56%
Values	Daily Returns

Modiv Inc  vs.  Gaucho Group Holdings

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. In spite of latest unsteady performance, the Stock's fundamental indicators remain stable and the latest fuss on Wall Street may also be a sign of long-term gains for the venture sophisticated investors.

Gaucho Group Holdings

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Gaucho Group Holdings has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of inconsistent performance in the last few months, the Stock's basic indicators remain very healthy which may send shares a bit higher in January 2025. The recent disarray may also be a sign of long period up-swing for the firm investors.

Pair Trading with Modiv and Gaucho Group

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

The idea behind Modiv Inc and Gaucho Group Holdings 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 ETFs module to find actively traded Exchange Traded Funds (ETF) from around the world.