Correlation Between Spirit Realty and Modiv

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

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

Diversification Opportunities for Spirit Realty and Modiv

0.0

Correlation Coefficient

Spirit Realty  Modiv

Pay attention - limited upside

The 3 months correlation between Spirit and Modiv is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding Spirit Realty Capital and Modiv Inc in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Modiv Inc and Spirit Realty 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 Spirit Realty Capital 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 Spirit Realty i.e., Spirit Realty and Modiv go up and down completely randomly.

Pair Corralation between Spirit Realty and Modiv

If you would invest  1,465  in Modiv Inc on December 28, 2024 and sell it today you would earn a total of  121.00  from holding Modiv Inc or generate 8.26% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Flat
Strength	Insignificant
Accuracy	0.0%
Values	Daily Returns

Spirit Realty Capital  vs.  Modiv Inc

Spirit Realty Capital

Risk-Adjusted Performance

Very Weak

Over the last 90 days Spirit Realty Capital has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of rather sound basic indicators, Spirit Realty is not utilizing all of its potentials. The latest stock price tumult, may contribute to shorter-term losses for the shareholders.

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 uncertain fundamental indicators, Modiv may actually be approaching a critical reversion point that can send shares even higher in April 2025.

Pair Trading with Spirit Realty and Modiv

The main advantage of trading using opposite Spirit Realty and Modiv positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Spirit Realty 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 Spirit Realty Capital 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 Sectors module to list of equity sectors categorizing publicly traded companies based on their primary business activities.