Correlation Between Atrium Mortgage and Wilmington Capital
Can any of the company-specific risk be diversified away by investing in both Atrium Mortgage and Wilmington 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 Atrium Mortgage and Wilmington Capital into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Atrium Mortgage Investment and Wilmington Capital Management, you can compare the effects of market volatilities on Atrium Mortgage and Wilmington 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 Atrium Mortgage with a short position of Wilmington Capital. Check out your portfolio center. Please also check ongoing floating volatility patterns of Atrium Mortgage and Wilmington Capital.
Diversification Opportunities for Atrium Mortgage and Wilmington Capital
-0.16 | Correlation Coefficient |
Good diversification
The 3 months correlation between Atrium and Wilmington is -0.16. Overlapping area represents the amount of risk that can be diversified away by holding Atrium Mortgage Investment and Wilmington Capital Management in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Wilmington Capital and Atrium Mortgage 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 Atrium Mortgage Investment are associated (or correlated) with Wilmington Capital. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Wilmington Capital has no effect on the direction of Atrium Mortgage i.e., Atrium Mortgage and Wilmington Capital go up and down completely randomly.
Pair Corralation between Atrium Mortgage and Wilmington Capital
Assuming the 90 days horizon Atrium Mortgage is expected to generate 1.73 times less return on investment than Wilmington Capital. But when comparing it to its historical volatility, Atrium Mortgage Investment is 3.73 times less risky than Wilmington Capital. It trades about 0.05 of its potential returns per unit of risk. Wilmington Capital Management is currently generating about 0.02 of returns per unit of risk over similar time horizon. If you would invest 226.00 in Wilmington Capital Management on September 3, 2024 and sell it today you would earn a total of 24.00 from holding Wilmington Capital Management or generate 10.62% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Atrium Mortgage Investment vs. Wilmington Capital Management
Performance |
| Timeline |
| Atrium Mortgage Inve |
| Wilmington Capital |
Atrium Mortgage and Wilmington Capital Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Atrium Mortgage and Wilmington Capital
The main advantage of trading using opposite Atrium Mortgage and Wilmington Capital positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Atrium Mortgage position performs unexpectedly, Wilmington 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 Wilmington Capital will offset losses from the drop in Wilmington Capital's long position.| Atrium Mortgage vs. Timbercreek Financial Corp | Atrium Mortgage vs. Firm Capital Mortgage | Atrium Mortgage vs. MCAN Mortgage | Atrium Mortgage vs. First National Financial |
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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 Watchlist Optimization module to optimize watchlists to build efficient portfolios or rebalance existing positions based on the mean-variance optimization algorithm.
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