Correlation Between ACRES Commercial and New York
Can any of the company-specific risk be diversified away by investing in both ACRES Commercial and New York 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 New York 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 New York Mortgage, you can compare the effects of market volatilities on ACRES Commercial and New York 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 New York. Check out your portfolio center. Please also check ongoing floating volatility patterns of ACRES Commercial and New York.
Diversification Opportunities for ACRES Commercial and New York
0.66 | Correlation Coefficient |
Poor diversification
The 3 months correlation between ACRES and New is 0.66. Overlapping area represents the amount of risk that can be diversified away by holding ACRES Commercial Realty and New York Mortgage in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on New York Mortgage 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 New York. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of New York Mortgage has no effect on the direction of ACRES Commercial i.e., ACRES Commercial and New York go up and down completely randomly.
Pair Corralation between ACRES Commercial and New York
Assuming the 90 days trading horizon ACRES Commercial Realty is expected to generate 1.6 times more return on investment than New York. However, ACRES Commercial is 1.6 times more volatile than New York Mortgage. It trades about 0.11 of its potential returns per unit of risk. New York Mortgage is currently generating about 0.11 per unit of risk. If you would invest 1,983 in ACRES Commercial Realty on August 24, 2024 and sell it today you would earn a total of 310.00 from holding ACRES Commercial Realty or generate 15.63% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
ACRES Commercial Realty vs. New York Mortgage
Performance |
| Timeline |
| ACRES Commercial Realty |
| New York Mortgage |
ACRES Commercial and New York Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with ACRES Commercial and New York
The main advantage of trading using opposite ACRES Commercial and New York positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if ACRES Commercial position performs unexpectedly, New York 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 New York will offset losses from the drop in New York's long position.| ACRES Commercial vs. ACRES Commercial Realty | ACRES Commercial vs. Arbor Realty Trust | ACRES Commercial vs. Aquagold International | ACRES Commercial vs. Morningstar Unconstrained Allocation |
| New York vs. ACRES Commercial Realty | New York vs. Chimera Investment | New York vs. Cherry Hill Mortgage | New York vs. Cherry Hill Mortgage |
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 Sync Your Broker module to sync your existing holdings, watchlists, positions or portfolios from thousands of online brokerage services, banks, investment account aggregators and robo-advisors..
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