Correlation Between ARMOUR Residential and Global Medical
Can any of the company-specific risk be diversified away by investing in both ARMOUR Residential and Global Medical 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 ARMOUR Residential and Global Medical into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between ARMOUR Residential REIT and Global Medical REIT, you can compare the effects of market volatilities on ARMOUR Residential and Global Medical 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 ARMOUR Residential with a short position of Global Medical. Check out your portfolio center. Please also check ongoing floating volatility patterns of ARMOUR Residential and Global Medical.
Diversification Opportunities for ARMOUR Residential and Global Medical
0.48 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between ARMOUR and Global is 0.48. Overlapping area represents the amount of risk that can be diversified away by holding ARMOUR Residential REIT and Global Medical REIT in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Global Medical REIT and ARMOUR Residential 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 ARMOUR Residential REIT are associated (or correlated) with Global Medical. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Global Medical REIT has no effect on the direction of ARMOUR Residential i.e., ARMOUR Residential and Global Medical go up and down completely randomly.
Pair Corralation between ARMOUR Residential and Global Medical
Assuming the 90 days trading horizon ARMOUR Residential REIT is expected to under-perform the Global Medical. But the preferred stock apears to be less risky and, when comparing its historical volatility, ARMOUR Residential REIT is 1.14 times less risky than Global Medical. The preferred stock trades about -0.16 of its potential returns per unit of risk. The Global Medical REIT is currently generating about 0.03 of returns per unit of risk over similar time horizon. If you would invest 2,525 in Global Medical REIT on August 24, 2024 and sell it today you would earn a total of 15.00 from holding Global Medical REIT or generate 0.59% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
ARMOUR Residential REIT vs. Global Medical REIT
Performance |
| Timeline |
| ARMOUR Residential REIT |
| Global Medical REIT |
ARMOUR Residential and Global Medical Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with ARMOUR Residential and Global Medical
The main advantage of trading using opposite ARMOUR Residential and Global Medical positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if ARMOUR Residential position performs unexpectedly, Global Medical 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 Global Medical will offset losses from the drop in Global Medical's long position.| ARMOUR Residential vs. Annaly Capital Management | ARMOUR Residential vs. Annaly Capital Management | ARMOUR Residential vs. AGNC Investment Corp | ARMOUR Residential vs. New York Mortgage |
| Global Medical vs. Global Medical REIT | Global Medical vs. Community Healthcare Trust | Global Medical vs. National Health Investors | Global Medical vs. Healthcare Realty Trust |
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 Bond Analysis module to evaluate and analyze corporate bonds as a potential investment for your portfolios..
Other Complementary Tools
| Commodity Directory Find actively traded commodities issued by global exchanges | |
| Portfolio Optimization Compute new portfolio that will generate highest expected return given your specified tolerance for risk | |
| Stock Tickers Use high-impact, comprehensive, and customizable stock tickers that can be easily integrated to any websites | |
| Stocks Directory Find actively traded stocks across global markets | |
| Equity Search Search for actively traded equities including funds and ETFs from over 30 global markets |