Correlation Between ELLINGTON FINL and LendingTree
Can any of the company-specific risk be diversified away by investing in both ELLINGTON FINL and LendingTree 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 LendingTree 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 LendingTree, you can compare the effects of market volatilities on ELLINGTON FINL and LendingTree 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 LendingTree. Check out your portfolio center. Please also check ongoing floating volatility patterns of ELLINGTON FINL and LendingTree.
Diversification Opportunities for ELLINGTON FINL and LendingTree
-0.58 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between ELLINGTON and LendingTree is -0.58. Overlapping area represents the amount of risk that can be diversified away by holding ELLINGTON FINL INC and LendingTree in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on LendingTree 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 LendingTree. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of LendingTree has no effect on the direction of ELLINGTON FINL i.e., ELLINGTON FINL and LendingTree go up and down completely randomly.
Pair Corralation between ELLINGTON FINL and LendingTree
Assuming the 90 days horizon ELLINGTON FINL INC is expected to generate 0.22 times more return on investment than LendingTree. However, ELLINGTON FINL INC is 4.56 times less risky than LendingTree. It trades about 0.06 of its potential returns per unit of risk. LendingTree is currently generating about -0.01 per unit of risk. If you would invest 1,128 in ELLINGTON FINL INC on November 2, 2024 and sell it today you would earn a total of 62.00 from holding ELLINGTON FINL INC or generate 5.5% 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. LendingTree
Performance |
| Timeline |
| ELLINGTON FINL INC |
| LendingTree |
ELLINGTON FINL and LendingTree Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with ELLINGTON FINL and LendingTree
The main advantage of trading using opposite ELLINGTON FINL and LendingTree positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if ELLINGTON FINL position performs unexpectedly, LendingTree 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 LendingTree will offset losses from the drop in LendingTree's long position.| ELLINGTON FINL vs. Mr Cooper Group | ELLINGTON FINL vs. PennyMac Financial Services | ELLINGTON FINL vs. OSB GROUP PLC | ELLINGTON FINL vs. Deutsche Pfandbriefbank AG |
| LendingTree vs. MAGNUM MINING EXP | LendingTree vs. GEELY AUTOMOBILE | LendingTree vs. Carsales | LendingTree vs. Perseus Mining Limited |
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 ETF Categories module to list of ETF categories grouped based on various criteria, such as the investment strategy or type of investments.
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