Correlation Between Ellington Residential and Generationome Properties
Can any of the company-specific risk be diversified away by investing in both Ellington Residential and Generationome Properties 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 Generationome Properties 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 Generationome Properties, you can compare the effects of market volatilities on Ellington Residential and Generationome Properties 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 Generationome Properties. Check out your portfolio center. Please also check ongoing floating volatility patterns of Ellington Residential and Generationome Properties.
Diversification Opportunities for Ellington Residential and Generationome Properties
-0.13 | Correlation Coefficient |
Good diversification
The 3 months correlation between Ellington and Generationome is -0.13. Overlapping area represents the amount of risk that can be diversified away by holding Ellington Residential Mortgage and Generationome Properties in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Generationome Properties 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 Generationome Properties. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Generationome Properties has no effect on the direction of Ellington Residential i.e., Ellington Residential and Generationome Properties go up and down completely randomly.
Pair Corralation between Ellington Residential and Generationome Properties
Given the investment horizon of 90 days Ellington Residential Mortgage is expected to generate 0.49 times more return on investment than Generationome Properties. However, Ellington Residential Mortgage is 2.04 times less risky than Generationome Properties. It trades about 0.01 of its potential returns per unit of risk. Generationome Properties is currently generating about -0.08 per unit of risk. If you would invest 657.00 in Ellington Residential Mortgage on November 2, 2024 and sell it today you would earn a total of 1.00 from holding Ellington Residential Mortgage or generate 0.15% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Ellington Residential Mortgage vs. Generationome Properties
Performance |
| Timeline |
| Ellington Residential |
| Generationome Properties |
Ellington Residential and Generationome Properties Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Ellington Residential and Generationome Properties
The main advantage of trading using opposite Ellington Residential and Generationome Properties positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Ellington Residential position performs unexpectedly, Generationome Properties 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 Generationome Properties will offset losses from the drop in Generationome Properties' long position.| Ellington Residential vs. Dynex Capital | Ellington Residential vs. Orchid Island Capital | Ellington Residential vs. ARMOUR Residential REIT | Ellington Residential vs. Ready Capital Corp |
| Generationome Properties vs. One Liberty Properties | Generationome Properties vs. Modiv Inc | Generationome Properties vs. Armada Hflr Pr | Generationome Properties vs. Presidio Property Trust |
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 Global Correlations module to find global opportunities by holding instruments from different markets.
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