Correlation Between ACRES Commercial and Sachem Capital
Can any of the company-specific risk be diversified away by investing in both ACRES Commercial and Sachem Capital 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 ACRES Commercial and Sachem Capital into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between ACRES Commercial Realty and Sachem Capital Corp, you can compare the effects of market volatilities on ACRES Commercial and Sachem Capital 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 ACRES Commercial with a short position of Sachem Capital. Check out your portfolio center. Please also check ongoing floating volatility patterns of ACRES Commercial and Sachem Capital.
Diversification Opportunities for ACRES Commercial and Sachem Capital
-0.65 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between ACRES and Sachem is -0.65. Overlapping area represents the amount of risk that can be diversified away by holding ACRES Commercial Realty and Sachem Capital Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Sachem Capital Corp and ACRES Commercial 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 ACRES Commercial Realty are associated (or correlated) with Sachem Capital. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Sachem Capital Corp has no effect on the direction of ACRES Commercial i.e., ACRES Commercial and Sachem Capital go up and down completely randomly.
Pair Corralation between ACRES Commercial and Sachem Capital
Assuming the 90 days trading horizon ACRES Commercial Realty is expected to generate 0.09 times more return on investment than Sachem Capital. However, ACRES Commercial Realty is 11.69 times less risky than Sachem Capital. It trades about 0.22 of its potential returns per unit of risk. Sachem Capital Corp is currently generating about -0.14 per unit of risk. If you would invest 2,345 in ACRES Commercial Realty on August 28, 2024 and sell it today you would earn a total of 170.00 from holding ACRES Commercial Realty or generate 7.25% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
ACRES Commercial Realty vs. Sachem Capital Corp
Performance |
| Timeline |
| ACRES Commercial Realty |
| Sachem Capital Corp |
ACRES Commercial and Sachem Capital Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with ACRES Commercial and Sachem Capital
The main advantage of trading using opposite ACRES Commercial and Sachem Capital positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if ACRES Commercial position performs unexpectedly, Sachem Capital 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 Sachem Capital will offset losses from the drop in Sachem Capital's long position.| ACRES Commercial vs. Annaly Capital Management | ACRES Commercial vs. Invesco Mortgage Capital | ACRES Commercial vs. Invesco Mortgage Capital | ACRES Commercial vs. Chimera Investment |
| Sachem Capital vs. Apollo Commercial Real | Sachem Capital vs. Ready Capital Corp | Sachem Capital vs. Ellington Residential Mortgage | Sachem Capital vs. KKR Real Estate |
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 Equity Valuation module to check real value of public entities based on technical and fundamental data.
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