Correlation Between Cherry Hill and Chicago Atlantic
Can any of the company-specific risk be diversified away by investing in both Cherry Hill 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 Cherry Hill and Chicago Atlantic into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Cherry Hill Mortgage and Chicago Atlantic Real, you can compare the effects of market volatilities on Cherry Hill 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 Cherry Hill with a short position of Chicago Atlantic. Check out your portfolio center. Please also check ongoing floating volatility patterns of Cherry Hill and Chicago Atlantic.
Diversification Opportunities for Cherry Hill and Chicago Atlantic
-0.38 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Cherry and Chicago is -0.38. Overlapping area represents the amount of risk that can be diversified away by holding Cherry Hill Mortgage 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 Cherry Hill 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 Cherry Hill Mortgage 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 Cherry Hill i.e., Cherry Hill and Chicago Atlantic go up and down completely randomly.
Pair Corralation between Cherry Hill and Chicago Atlantic
Assuming the 90 days trading horizon Cherry Hill Mortgage is expected to under-perform the Chicago Atlantic. But the preferred stock apears to be less risky and, when comparing its historical volatility, Cherry Hill Mortgage is 1.11 times less risky than Chicago Atlantic. The preferred stock trades about -0.1 of its potential returns per unit of risk. The Chicago Atlantic Real is currently generating about 0.12 of returns per unit of risk over similar time horizon. If you would invest 1,566 in Chicago Atlantic Real on November 18, 2024 and sell it today you would earn a total of 34.00 from holding Chicago Atlantic Real or generate 2.17% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Cherry Hill Mortgage vs. Chicago Atlantic Real
Performance |
| Timeline |
| Cherry Hill Mortgage |
| Chicago Atlantic Real |
Cherry Hill and Chicago Atlantic Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Cherry Hill and Chicago Atlantic
The main advantage of trading using opposite Cherry Hill and Chicago Atlantic positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Cherry Hill 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.| Cherry Hill vs. Lument Finance Trust | Cherry Hill vs. PennyMac Mortgage Investment | Cherry Hill vs. AG Mortgage Investment | Cherry Hill vs. Invesco Mortgage Capital |
| Chicago Atlantic vs. KKR Real Estate | Chicago Atlantic vs. Ellington Residential Mortgage | Chicago Atlantic vs. Claros Mortgage Trust | Chicago Atlantic vs. Ares Commercial Real |
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 Instant Ratings module to determine any equity ratings based on digital recommendations. Macroaxis instant equity ratings are based on combination of fundamental analysis and risk-adjusted market performance.
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