Correlation Between DigitalBridge and Chimera Investment
Can any of the company-specific risk be diversified away by investing in both DigitalBridge and Chimera Investment 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 DigitalBridge and Chimera Investment into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between DigitalBridge Group and Chimera Investment, you can compare the effects of market volatilities on DigitalBridge and Chimera Investment 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 DigitalBridge with a short position of Chimera Investment. Check out your portfolio center. Please also check ongoing floating volatility patterns of DigitalBridge and Chimera Investment.
Diversification Opportunities for DigitalBridge and Chimera Investment
0.56 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between DigitalBridge and Chimera is 0.56. Overlapping area represents the amount of risk that can be diversified away by holding DigitalBridge Group and Chimera Investment in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Chimera Investment and DigitalBridge 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 DigitalBridge Group are associated (or correlated) with Chimera Investment. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Chimera Investment has no effect on the direction of DigitalBridge i.e., DigitalBridge and Chimera Investment go up and down completely randomly.
Pair Corralation between DigitalBridge and Chimera Investment
Assuming the 90 days trading horizon DigitalBridge Group is expected to under-perform the Chimera Investment. In addition to that, DigitalBridge is 1.75 times more volatile than Chimera Investment. It trades about -0.23 of its total potential returns per unit of risk. Chimera Investment is currently generating about 0.1 per unit of volatility. 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 |
DigitalBridge Group vs. Chimera Investment
Performance |
| Timeline |
| DigitalBridge Group |
| Chimera Investment |
DigitalBridge and Chimera Investment Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with DigitalBridge and Chimera Investment
The main advantage of trading using opposite DigitalBridge and Chimera Investment positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if DigitalBridge position performs unexpectedly, Chimera Investment 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 Chimera Investment will offset losses from the drop in Chimera Investment's long position.| DigitalBridge vs. DigitalBridge Group | DigitalBridge vs. DigitalBridge Group | DigitalBridge vs. ACRES Commercial Realty | DigitalBridge vs. Chimera Investment |
| Chimera Investment vs. PennyMac Mortgage Investment | Chimera Investment vs. Two Harbors Investment | Chimera Investment vs. Chimera Investment | Chimera Investment 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 Equity Analysis module to research over 250,000 global equities including funds, stocks and ETFs to find investment opportunities.
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