Correlation Between Chimera Investment and ACRES Commercial
Can any of the company-specific risk be diversified away by investing in both Chimera Investment 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 Chimera Investment and ACRES Commercial into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Chimera Investment and ACRES Commercial Realty, you can compare the effects of market volatilities on Chimera Investment 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 Chimera Investment with a short position of ACRES Commercial. Check out your portfolio center. Please also check ongoing floating volatility patterns of Chimera Investment and ACRES Commercial.
Diversification Opportunities for Chimera Investment and ACRES Commercial
-0.42 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Chimera and ACRES is -0.42. Overlapping area represents the amount of risk that can be diversified away by holding Chimera Investment 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 Chimera Investment 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 Chimera Investment 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 Chimera Investment i.e., Chimera Investment and ACRES Commercial go up and down completely randomly.
Pair Corralation between Chimera Investment and ACRES Commercial
Assuming the 90 days trading horizon Chimera Investment is expected to generate 0.42 times more return on investment than ACRES Commercial. However, Chimera Investment is 2.37 times less risky than ACRES Commercial. It trades about 0.11 of its potential returns per unit of risk. ACRES Commercial Realty is currently generating about 0.04 per unit of risk. If you would invest 2,501 in Chimera Investment on November 9, 2024 and sell it today you would earn a total of 17.00 from holding Chimera Investment or generate 0.68% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Chimera Investment vs. ACRES Commercial Realty
Performance |
| Timeline |
| Chimera Investment |
| ACRES Commercial Realty |
Chimera Investment and ACRES Commercial Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Chimera Investment and ACRES Commercial
The main advantage of trading using opposite Chimera Investment and ACRES Commercial positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Chimera Investment 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.| Chimera Investment vs. MFA Financial | Chimera Investment vs. Two Harbors Investment | Chimera Investment vs. Invesco Mortgage Capital | Chimera Investment vs. Chimera Investment |
| ACRES Commercial vs. ACRES Commercial Realty | ACRES Commercial vs. Arbor Realty Trust | ACRES Commercial vs. Arbor 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 Portfolio Volatility module to check portfolio volatility and analyze historical return density to properly model market risk.
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