Correlation Between Distoken Acquisition and Ellington Residential
Can any of the company-specific risk be diversified away by investing in both Distoken Acquisition and Ellington Residential 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 Distoken Acquisition and Ellington Residential into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Distoken Acquisition and Ellington Residential Mortgage, you can compare the effects of market volatilities on Distoken Acquisition and Ellington Residential 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 Distoken Acquisition with a short position of Ellington Residential. Check out your portfolio center. Please also check ongoing floating volatility patterns of Distoken Acquisition and Ellington Residential.
Diversification Opportunities for Distoken Acquisition and Ellington Residential
-0.57 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Distoken and Ellington is -0.57. Overlapping area represents the amount of risk that can be diversified away by holding Distoken Acquisition and Ellington Residential Mortgage in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Ellington Residential and Distoken Acquisition 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 Distoken Acquisition are associated (or correlated) with Ellington Residential. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Ellington Residential has no effect on the direction of Distoken Acquisition i.e., Distoken Acquisition and Ellington Residential go up and down completely randomly.
Pair Corralation between Distoken Acquisition and Ellington Residential
Given the investment horizon of 90 days Distoken Acquisition is expected to generate 0.31 times more return on investment than Ellington Residential. However, Distoken Acquisition is 3.2 times less risky than Ellington Residential. It trades about 0.24 of its potential returns per unit of risk. Ellington Residential Mortgage is currently generating about -0.11 per unit of risk. If you would invest 1,091 in Distoken Acquisition on August 24, 2024 and sell it today you would earn a total of 27.40 from holding Distoken Acquisition or generate 2.51% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Distoken Acquisition vs. Ellington Residential Mortgage
Performance |
| Timeline |
| Distoken Acquisition |
| Ellington Residential |
Distoken Acquisition and Ellington Residential Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Distoken Acquisition and Ellington Residential
The main advantage of trading using opposite Distoken Acquisition and Ellington Residential positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Distoken Acquisition position performs unexpectedly, Ellington Residential 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 Ellington Residential will offset losses from the drop in Ellington Residential's long position.| Distoken Acquisition vs. ABIVAX Socit Anonyme | Distoken Acquisition vs. SCOR PK | Distoken Acquisition vs. HUMANA INC | Distoken Acquisition vs. Aquagold International |
| Ellington Residential vs. Dynex Capital | Ellington Residential vs. Orchid Island Capital | Ellington Residential vs. ARMOUR Residential REIT | Ellington Residential vs. Ready Capital 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 Odds Of Bankruptcy module to get analysis of equity chance of financial distress in the next 2 years.
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