Correlation Between Cherry Hill and Acres Commercial
Can any of the company-specific risk be diversified away by investing in both Cherry Hill and Acres Commercial 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 Acres Commercial 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 Acres Commercial Realty, you can compare the effects of market volatilities on Cherry Hill and Acres Commercial 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 Acres Commercial. Check out your portfolio center. Please also check ongoing floating volatility patterns of Cherry Hill and Acres Commercial.
Diversification Opportunities for Cherry Hill and Acres Commercial
0.86 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Cherry and Acres is 0.86. Overlapping area represents the amount of risk that can be diversified away by holding Cherry Hill Mortgage and Acres Commercial Realty in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Acres Commercial Realty 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 Acres Commercial. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Acres Commercial Realty has no effect on the direction of Cherry Hill i.e., Cherry Hill and Acres Commercial go up and down completely randomly.
Pair Corralation between Cherry Hill and Acres Commercial
Given the investment horizon of 90 days Cherry Hill is expected to generate 1.24 times less return on investment than Acres Commercial. But when comparing it to its historical volatility, Cherry Hill Mortgage is 1.08 times less risky than Acres Commercial. It trades about 0.37 of its potential returns per unit of risk. Acres Commercial Realty is currently generating about 0.43 of returns per unit of risk over similar time horizon. If you would invest 1,753 in Acres Commercial Realty on November 28, 2024 and sell it today you would earn a total of 317.00 from holding Acres Commercial Realty or generate 18.08% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Cherry Hill Mortgage vs. Acres Commercial Realty
Performance |
| Timeline |
| Cherry Hill Mortgage |
| Acres Commercial Realty |
Cherry Hill and Acres Commercial Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Cherry Hill and Acres Commercial
The main advantage of trading using opposite Cherry Hill and Acres Commercial positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Cherry Hill position performs unexpectedly, Acres Commercial 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 Acres Commercial will offset losses from the drop in Acres Commercial's long position.| Cherry Hill vs. Ellington Financial | Cherry Hill vs. Dynex Capital | Cherry Hill vs. Ares Commercial Real | Cherry Hill vs. Chimera Investment |
| Acres Commercial vs. Lument Finance Trust | Acres Commercial vs. AG Mortgage Investment | Acres Commercial vs. Rithm Capital Corp | Acres Commercial vs. Cherry Hill Mortgage |
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 Idea Breakdown module to analyze constituents of all Macroaxis ideas. Macroaxis investment ideas are predefined, sector-focused investing themes.
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