Correlation Between Chimera Investment and Granite Point
Can any of the company-specific risk be diversified away by investing in both Chimera Investment and Granite Point 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 Granite Point into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Chimera Investment and Granite Point Mortgage, you can compare the effects of market volatilities on Chimera Investment and Granite Point 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 Granite Point. Check out your portfolio center. Please also check ongoing floating volatility patterns of Chimera Investment and Granite Point.
Diversification Opportunities for Chimera Investment and Granite Point
-0.12 | Correlation Coefficient |
Good diversification
The 3 months correlation between Chimera and Granite is -0.12. Overlapping area represents the amount of risk that can be diversified away by holding Chimera Investment and Granite Point Mortgage in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Granite Point 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 Granite Point. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Granite Point Mortgage has no effect on the direction of Chimera Investment i.e., Chimera Investment and Granite Point go up and down completely randomly.
Pair Corralation between Chimera Investment and Granite Point
Considering the 90-day investment horizon Chimera Investment is expected to under-perform the Granite Point. But the stock apears to be less risky and, when comparing its historical volatility, Chimera Investment is 1.58 times less risky than Granite Point. The stock trades about -0.1 of its potential returns per unit of risk. The Granite Point Mortgage is currently generating about 0.26 of returns per unit of risk over similar time horizon. If you would invest 303.00 in Granite Point Mortgage on August 28, 2024 and sell it today you would earn a total of 44.00 from holding Granite Point Mortgage or generate 14.52% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Chimera Investment vs. Granite Point Mortgage
Performance |
| Timeline |
| Chimera Investment |
| Granite Point Mortgage |
Chimera Investment and Granite Point Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Chimera Investment and Granite Point
The main advantage of trading using opposite Chimera Investment and Granite Point positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Chimera Investment position performs unexpectedly, Granite Point 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 Granite Point will offset losses from the drop in Granite Point's long position.| Chimera Investment vs. Blackstone Mortgage Trust | Chimera Investment vs. Omega Healthcare Investors | Chimera Investment vs. Medical Properties Trust |
| Granite Point vs. MFA Financial | Granite Point vs. Angel Oak Mortgage | Granite Point vs. Two Harbors Investments | Granite Point vs. PennyMac Mortgage 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 Holdings module to check your current holdings and cash postion to detemine if your portfolio needs rebalancing.
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