Correlation Between Chimera Investment and DigitalBridge
Can any of the company-specific risk be diversified away by investing in both Chimera Investment and DigitalBridge 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 DigitalBridge into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Chimera Investment and DigitalBridge Group, you can compare the effects of market volatilities on Chimera Investment and DigitalBridge 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 DigitalBridge. Check out your portfolio center. Please also check ongoing floating volatility patterns of Chimera Investment and DigitalBridge.
Diversification Opportunities for Chimera Investment and DigitalBridge
0.52 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Chimera and DigitalBridge is 0.52. Overlapping area represents the amount of risk that can be diversified away by holding Chimera Investment and DigitalBridge Group in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on DigitalBridge Group 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 DigitalBridge. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of DigitalBridge Group has no effect on the direction of Chimera Investment i.e., Chimera Investment and DigitalBridge go up and down completely randomly.
Pair Corralation between Chimera Investment and DigitalBridge
Assuming the 90 days trading horizon Chimera Investment is expected to generate 0.57 times more return on investment than DigitalBridge. However, Chimera Investment is 1.75 times less risky than DigitalBridge. It trades about 0.1 of its potential returns per unit of risk. DigitalBridge Group is currently generating about -0.23 per unit of risk. If you would invest 2,479 in Chimera Investment on August 25, 2024 and sell it today you would earn a total of 19.00 from holding Chimera Investment or generate 0.77% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Chimera Investment vs. DigitalBridge Group
Performance |
| Timeline |
| Chimera Investment |
| DigitalBridge Group |
Chimera Investment and DigitalBridge Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Chimera Investment and DigitalBridge
The main advantage of trading using opposite Chimera Investment and DigitalBridge positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Chimera Investment position performs unexpectedly, DigitalBridge 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 DigitalBridge will offset losses from the drop in DigitalBridge's long position.| Chimera Investment vs. PennyMac Mortgage Investment | Chimera Investment vs. Two Harbors Investment | Chimera Investment vs. Chimera Investment | Chimera Investment vs. PennyMac Mortgage Investment |
| DigitalBridge vs. DigitalBridge Group | DigitalBridge vs. DigitalBridge Group | DigitalBridge vs. ACRES Commercial Realty | DigitalBridge vs. Chimera Investment |
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 Suggestion module to get suggestions outside of your existing asset allocation including your own model portfolios.
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