Correlation Between Chimera Investment and Sachem Capital
Can any of the company-specific risk be diversified away by investing in both Chimera Investment and Sachem Capital 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 Sachem Capital into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Chimera Investment and Sachem Capital Corp, you can compare the effects of market volatilities on Chimera Investment and Sachem Capital 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 Sachem Capital. Check out your portfolio center. Please also check ongoing floating volatility patterns of Chimera Investment and Sachem Capital.
Diversification Opportunities for Chimera Investment and Sachem Capital
-0.78 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between Chimera and Sachem is -0.78. Overlapping area represents the amount of risk that can be diversified away by holding Chimera Investment and Sachem Capital Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Sachem Capital Corp 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 Sachem Capital. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Sachem Capital Corp has no effect on the direction of Chimera Investment i.e., Chimera Investment and Sachem Capital go up and down completely randomly.
Pair Corralation between Chimera Investment and Sachem Capital
Assuming the 90 days trading horizon Chimera Investment is expected to generate 0.27 times more return on investment than Sachem Capital. However, Chimera Investment is 3.7 times less risky than Sachem Capital. It trades about 0.16 of its potential returns per unit of risk. Sachem Capital Corp is currently generating about -0.05 per unit of risk. If you would invest 1,703 in Chimera Investment on August 31, 2024 and sell it today you would earn a total of 817.00 from holding Chimera Investment or generate 47.97% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Chimera Investment vs. Sachem Capital Corp
Performance |
| Timeline |
| Chimera Investment |
| Sachem Capital Corp |
Chimera Investment and Sachem Capital Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Chimera Investment and Sachem Capital
The main advantage of trading using opposite Chimera Investment and Sachem Capital positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Chimera Investment position performs unexpectedly, Sachem Capital 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 Sachem Capital will offset losses from the drop in Sachem Capital'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 |
| Sachem Capital vs. Apollo Commercial Real | Sachem Capital vs. Ready Capital Corp | Sachem Capital vs. Ellington Residential Mortgage | Sachem Capital vs. KKR Real Estate |
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 Sectors module to list of equity sectors categorizing publicly traded companies based on their primary business activities.
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