Correlation Between Arbor Realty and Ecc Cap
Can any of the company-specific risk be diversified away by investing in both Arbor Realty and Ecc Cap 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 Arbor Realty and Ecc Cap into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Arbor Realty Trust and Ecc Cap Corp, you can compare the effects of market volatilities on Arbor Realty and Ecc Cap 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 Arbor Realty with a short position of Ecc Cap. Check out your portfolio center. Please also check ongoing floating volatility patterns of Arbor Realty and Ecc Cap.
Diversification Opportunities for Arbor Realty and Ecc Cap
-0.55 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Arbor and Ecc is -0.55. Overlapping area represents the amount of risk that can be diversified away by holding Arbor Realty Trust and Ecc Cap Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Ecc Cap Corp and Arbor 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 Arbor Realty Trust are associated (or correlated) with Ecc Cap. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Ecc Cap Corp has no effect on the direction of Arbor Realty i.e., Arbor Realty and Ecc Cap go up and down completely randomly.
Pair Corralation between Arbor Realty and Ecc Cap
If you would invest 2,049 in Arbor Realty Trust on August 30, 2024 and sell it today you would earn a total of 76.00 from holding Arbor Realty Trust or generate 3.71% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 4.35% |
| Values | Daily Returns |
Arbor Realty Trust vs. Ecc Cap Corp
Performance |
| Timeline |
| Arbor Realty Trust |
| Ecc Cap Corp |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
Arbor Realty and Ecc Cap Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Arbor Realty and Ecc Cap
The main advantage of trading using opposite Arbor Realty and Ecc Cap positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Arbor Realty position performs unexpectedly, Ecc Cap 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 Ecc Cap will offset losses from the drop in Ecc Cap's long position.| Arbor Realty vs. Arbor Realty Trust | Arbor Realty vs. Arbor Realty Trust | Arbor Realty vs. Chimera Investment | Arbor Realty vs. ARMOUR Residential REIT |
| Ecc Cap vs. Ready Capital Corp | Ecc Cap vs. Ellington Residential Mortgage | Ecc Cap vs. Ellington Financial | Ecc Cap vs. Dynex Capital |
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 Portfolio Optimization module to compute new portfolio that will generate highest expected return given your specified tolerance for risk.
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