Correlation Between Ellington Residential and Cipher Mining
Can any of the company-specific risk be diversified away by investing in both Ellington Residential and Cipher Mining 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 Ellington Residential and Cipher Mining into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Ellington Residential Mortgage and Cipher Mining, you can compare the effects of market volatilities on Ellington Residential and Cipher Mining 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 Ellington Residential with a short position of Cipher Mining. Check out your portfolio center. Please also check ongoing floating volatility patterns of Ellington Residential and Cipher Mining.
Diversification Opportunities for Ellington Residential and Cipher Mining
-0.46 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Ellington and Cipher is -0.46. Overlapping area represents the amount of risk that can be diversified away by holding Ellington Residential Mortgage and Cipher Mining in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Cipher Mining and Ellington Residential 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 Ellington Residential Mortgage are associated (or correlated) with Cipher Mining. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Cipher Mining has no effect on the direction of Ellington Residential i.e., Ellington Residential and Cipher Mining go up and down completely randomly.
Pair Corralation between Ellington Residential and Cipher Mining
Given the investment horizon of 90 days Ellington Residential is expected to generate 12.02 times less return on investment than Cipher Mining. But when comparing it to its historical volatility, Ellington Residential Mortgage is 5.91 times less risky than Cipher Mining. It trades about 0.08 of its potential returns per unit of risk. Cipher Mining is currently generating about 0.16 of returns per unit of risk over similar time horizon. If you would invest 528.00 in Cipher Mining on August 31, 2024 and sell it today you would earn a total of 142.00 from holding Cipher Mining or generate 26.89% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Ellington Residential Mortgage vs. Cipher Mining
Performance |
| Timeline |
| Ellington Residential |
| Cipher Mining |
Ellington Residential and Cipher Mining Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Ellington Residential and Cipher Mining
The main advantage of trading using opposite Ellington Residential and Cipher Mining positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Ellington Residential position performs unexpectedly, Cipher Mining 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 Cipher Mining will offset losses from the drop in Cipher Mining's long position.| Ellington Residential vs. Ellington Financial | Ellington Residential vs. Dynex Capital | Ellington Residential vs. Orchid Island Capital | Ellington Residential vs. Invesco Mortgage Capital |
| Cipher Mining vs. Iris Energy | Cipher Mining vs. CleanSpark | Cipher Mining vs. Stronghold Digital Mining | Cipher Mining vs. Bitfarms |
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 Insider Screener module to find insiders across different sectors to evaluate their impact on performance.
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