Correlation Between ELLINGTON FINL and Deutsche Pfandbriefbank
Can any of the company-specific risk be diversified away by investing in both ELLINGTON FINL and Deutsche Pfandbriefbank 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 ELLINGTON FINL and Deutsche Pfandbriefbank into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between ELLINGTON FINL INC and Deutsche Pfandbriefbank AG, you can compare the effects of market volatilities on ELLINGTON FINL and Deutsche Pfandbriefbank 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 ELLINGTON FINL with a short position of Deutsche Pfandbriefbank. Check out your portfolio center. Please also check ongoing floating volatility patterns of ELLINGTON FINL and Deutsche Pfandbriefbank.
Diversification Opportunities for ELLINGTON FINL and Deutsche Pfandbriefbank
-0.46 | Correlation Coefficient |
Very good diversification
The 3 months correlation between ELLINGTON and Deutsche is -0.46. Overlapping area represents the amount of risk that can be diversified away by holding ELLINGTON FINL INC and Deutsche Pfandbriefbank AG in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Deutsche Pfandbriefbank and ELLINGTON FINL 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 ELLINGTON FINL INC are associated (or correlated) with Deutsche Pfandbriefbank. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Deutsche Pfandbriefbank has no effect on the direction of ELLINGTON FINL i.e., ELLINGTON FINL and Deutsche Pfandbriefbank go up and down completely randomly.
Pair Corralation between ELLINGTON FINL and Deutsche Pfandbriefbank
Assuming the 90 days horizon ELLINGTON FINL is expected to generate 1.72 times less return on investment than Deutsche Pfandbriefbank. But when comparing it to its historical volatility, ELLINGTON FINL INC is 2.57 times less risky than Deutsche Pfandbriefbank. It trades about 0.36 of its potential returns per unit of risk. Deutsche Pfandbriefbank AG is currently generating about 0.24 of returns per unit of risk over similar time horizon. If you would invest 474.00 in Deutsche Pfandbriefbank AG on October 20, 2024 and sell it today you would earn a total of 51.00 from holding Deutsche Pfandbriefbank AG or generate 10.76% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
ELLINGTON FINL INC vs. Deutsche Pfandbriefbank AG
Performance |
| Timeline |
| ELLINGTON FINL INC |
| Deutsche Pfandbriefbank |
ELLINGTON FINL and Deutsche Pfandbriefbank Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with ELLINGTON FINL and Deutsche Pfandbriefbank
The main advantage of trading using opposite ELLINGTON FINL and Deutsche Pfandbriefbank positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if ELLINGTON FINL position performs unexpectedly, Deutsche Pfandbriefbank 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 Deutsche Pfandbriefbank will offset losses from the drop in Deutsche Pfandbriefbank's long position.| ELLINGTON FINL vs. Mr Cooper Group | ELLINGTON FINL vs. PennyMac Financial Services | ELLINGTON FINL vs. OSB GROUP PLC | ELLINGTON FINL vs. FIRST NATIONAL FIN |
| Deutsche Pfandbriefbank vs. Mr Cooper Group | Deutsche Pfandbriefbank vs. PennyMac Financial Services | Deutsche Pfandbriefbank vs. OSB GROUP PLC | Deutsche Pfandbriefbank vs. FIRST NATIONAL FIN |
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 Pattern Recognition module to use different Pattern Recognition models to time the market across multiple global exchanges.
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