Correlation Between Great Ajax and New York
Can any of the company-specific risk be diversified away by investing in both Great Ajax 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 Great Ajax and New York into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Great Ajax Corp and New York Mortgage, you can compare the effects of market volatilities on Great Ajax 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 Great Ajax with a short position of New York. Check out your portfolio center. Please also check ongoing floating volatility patterns of Great Ajax and New York.
Diversification Opportunities for Great Ajax and New York
0.53 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Great and New is 0.53. Overlapping area represents the amount of risk that can be diversified away by holding Great Ajax Corp 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 Great Ajax 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 Great Ajax Corp 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 Great Ajax i.e., Great Ajax and New York go up and down completely randomly.
Pair Corralation between Great Ajax and New York
Considering the 90-day investment horizon Great Ajax Corp is expected to generate 1.18 times more return on investment than New York. However, Great Ajax is 1.18 times more volatile than New York Mortgage. It trades about -0.02 of its potential returns per unit of risk. New York Mortgage is currently generating about -0.05 per unit of risk. If you would invest 314.00 in Great Ajax Corp on August 28, 2024 and sell it today you would lose (13.00) from holding Great Ajax Corp or give up 4.14% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Great Ajax Corp vs. New York Mortgage
Performance |
| Timeline |
| Great Ajax Corp |
| New York Mortgage |
Great Ajax and New York Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Great Ajax and New York
The main advantage of trading using opposite Great Ajax and New York positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Great Ajax 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.| Great Ajax vs. Blackstone Mortgage Trust | Great Ajax vs. Omega Healthcare Investors | Great Ajax vs. Medical Properties Trust |
| New York vs. Two Harbors Investments | New York vs. ARMOUR Residential REIT | New York vs. Annaly Capital Management | New York vs. AGNC Investment 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 Technical Analysis module to check basic technical indicators and analysis based on most latest market data.
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