Correlation Between Broadmark Realty and ARMOUR Residential
Can any of the company-specific risk be diversified away by investing in both Broadmark Realty and ARMOUR Residential 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 Broadmark Realty and ARMOUR Residential into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Broadmark Realty Capital and ARMOUR Residential REIT, you can compare the effects of market volatilities on Broadmark Realty and ARMOUR Residential 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 Broadmark Realty with a short position of ARMOUR Residential. Check out your portfolio center. Please also check ongoing floating volatility patterns of Broadmark Realty and ARMOUR Residential.
Diversification Opportunities for Broadmark Realty and ARMOUR Residential
-0.55 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Broadmark and ARMOUR is -0.55. Overlapping area represents the amount of risk that can be diversified away by holding Broadmark Realty Capital and ARMOUR Residential REIT in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on ARMOUR Residential REIT and Broadmark Realty 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 Broadmark Realty Capital are associated (or correlated) with ARMOUR Residential. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of ARMOUR Residential REIT has no effect on the direction of Broadmark Realty i.e., Broadmark Realty and ARMOUR Residential go up and down completely randomly.
Pair Corralation between Broadmark Realty and ARMOUR Residential
If you would invest 482.00 in Broadmark Realty Capital on August 27, 2024 and sell it today you would earn a total of 0.00 from holding Broadmark Realty Capital or generate 0.0% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 4.76% |
| Values | Daily Returns |
Broadmark Realty Capital vs. ARMOUR Residential REIT
Performance |
| Timeline |
| Broadmark Realty Capital |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
| ARMOUR Residential REIT |
Broadmark Realty and ARMOUR Residential Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Broadmark Realty and ARMOUR Residential
The main advantage of trading using opposite Broadmark Realty and ARMOUR Residential positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Broadmark Realty position performs unexpectedly, ARMOUR Residential 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 ARMOUR Residential will offset losses from the drop in ARMOUR Residential's long position.| Broadmark Realty vs. Two Harbors Investments | Broadmark Realty vs. Ares Commercial Real | Broadmark Realty vs. Apollo Commercial Real | Broadmark Realty vs. Ellington Financial |
| ARMOUR Residential vs. Blackstone Mortgage Trust | ARMOUR Residential vs. Omega Healthcare Investors | ARMOUR Residential vs. Medical Properties 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 Companies Directory module to evaluate performance of over 100,000 Stocks, Funds, and ETFs against different fundamentals.
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