Correlation Between Chimera Investment and New York
Can any of the company-specific risk be diversified away by investing in both Chimera Investment and New York 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 New York into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Chimera Investment and New York Mortgage, you can compare the effects of market volatilities on Chimera Investment and New York 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 New York. Check out your portfolio center. Please also check ongoing floating volatility patterns of Chimera Investment and New York.
Diversification Opportunities for Chimera Investment and New York
0.92 | Correlation Coefficient |
Almost no diversification
The 3 months correlation between Chimera and New is 0.92. Overlapping area represents the amount of risk that can be diversified away by holding Chimera Investment and New York Mortgage in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on New York Mortgage 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 New York. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of New York Mortgage has no effect on the direction of Chimera Investment i.e., Chimera Investment and New York go up and down completely randomly.
Pair Corralation between Chimera Investment and New York
Assuming the 90 days trading horizon Chimera Investment is expected to generate 1.12 times more return on investment than New York. However, Chimera Investment is 1.12 times more volatile than New York Mortgage. It trades about 0.17 of its potential returns per unit of risk. New York Mortgage is currently generating about 0.15 per unit of risk. If you would invest 2,470 in Chimera Investment on August 27, 2024 and sell it today you would earn a total of 28.00 from holding Chimera Investment or generate 1.13% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Chimera Investment vs. New York Mortgage
Performance |
| Timeline |
| Chimera Investment |
| New York Mortgage |
Chimera Investment and New York Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Chimera Investment and New York
The main advantage of trading using opposite Chimera Investment and New York positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Chimera Investment position performs unexpectedly, New York 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 New York will offset losses from the drop in New York's long position.| Chimera Investment vs. Chimera Investment | Chimera Investment vs. PennyMac Mortgage Investment | Chimera Investment vs. Two Harbors Investment | Chimera Investment vs. Chimera Investment |
| New York vs. New York Mortgage | New York vs. AGNC Investment Corp | New York vs. Chimera Investment | New York vs. AGNC Investment Corp |
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 Volatility Analysis module to get historical volatility and risk analysis based on latest market data.
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