Correlation Between AFC Gamma and Chicago Atlantic
Can any of the company-specific risk be diversified away by investing in both AFC Gamma and Chicago Atlantic 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 AFC Gamma and Chicago Atlantic into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between AFC Gamma and Chicago Atlantic Real, you can compare the effects of market volatilities on AFC Gamma and Chicago Atlantic 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 AFC Gamma with a short position of Chicago Atlantic. Check out your portfolio center. Please also check ongoing floating volatility patterns of AFC Gamma and Chicago Atlantic.
Diversification Opportunities for AFC Gamma and Chicago Atlantic
-0.1 | Correlation Coefficient |
Good diversification
The 3 months correlation between AFC and Chicago is -0.1. Overlapping area represents the amount of risk that can be diversified away by holding AFC Gamma and Chicago Atlantic Real in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Chicago Atlantic Real and AFC Gamma 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 AFC Gamma are associated (or correlated) with Chicago Atlantic. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Chicago Atlantic Real has no effect on the direction of AFC Gamma i.e., AFC Gamma and Chicago Atlantic go up and down completely randomly.
Pair Corralation between AFC Gamma and Chicago Atlantic
Given the investment horizon of 90 days AFC Gamma is expected to under-perform the Chicago Atlantic. In addition to that, AFC Gamma is 2.25 times more volatile than Chicago Atlantic Real. It trades about -0.08 of its total potential returns per unit of risk. Chicago Atlantic Real is currently generating about 0.21 per unit of volatility. If you would invest 1,539 in Chicago Atlantic Real on August 24, 2024 and sell it today you would earn a total of 58.00 from holding Chicago Atlantic Real or generate 3.77% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
AFC Gamma vs. Chicago Atlantic Real
Performance |
| Timeline |
| AFC Gamma |
| Chicago Atlantic Real |
AFC Gamma and Chicago Atlantic Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with AFC Gamma and Chicago Atlantic
The main advantage of trading using opposite AFC Gamma and Chicago Atlantic positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if AFC Gamma position performs unexpectedly, Chicago Atlantic 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 Chicago Atlantic will offset losses from the drop in Chicago Atlantic's long position.| AFC Gamma vs. Newlake Capital Partners | AFC Gamma vs. SBA Communications Corp | AFC Gamma vs. Gladstone Land | AFC Gamma vs. Lamar Advertising |
| Chicago Atlantic vs. KKR Real Estate | Chicago Atlantic vs. Ellington Residential Mortgage | Chicago Atlantic vs. Claros Mortgage Trust | Chicago Atlantic vs. Great Ajax Corp |
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 Bollinger Bands module to use Bollinger Bands indicator to analyze target price for a given investing horizon.
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