Correlation Between Ellington Residential and Helix Acquisition
Can any of the company-specific risk be diversified away by investing in both Ellington Residential and Helix Acquisition 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 Helix Acquisition 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 Helix Acquisition Corp, you can compare the effects of market volatilities on Ellington Residential and Helix Acquisition 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 Helix Acquisition. Check out your portfolio center. Please also check ongoing floating volatility patterns of Ellington Residential and Helix Acquisition.
Diversification Opportunities for Ellington Residential and Helix Acquisition
-0.43 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Ellington and Helix is -0.43. Overlapping area represents the amount of risk that can be diversified away by holding Ellington Residential Mortgage and Helix Acquisition Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Helix Acquisition Corp 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 Helix Acquisition. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Helix Acquisition Corp has no effect on the direction of Ellington Residential i.e., Ellington Residential and Helix Acquisition go up and down completely randomly.
Pair Corralation between Ellington Residential and Helix Acquisition
Given the investment horizon of 90 days Ellington Residential Mortgage is expected to generate 2.3 times more return on investment than Helix Acquisition. However, Ellington Residential is 2.3 times more volatile than Helix Acquisition Corp. It trades about 0.14 of its potential returns per unit of risk. Helix Acquisition Corp is currently generating about -0.03 per unit of risk. If you would invest 656.00 in Ellington Residential Mortgage on August 30, 2024 and sell it today you would earn a total of 29.00 from holding Ellington Residential Mortgage or generate 4.42% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 95.65% |
| Values | Daily Returns |
Ellington Residential Mortgage vs. Helix Acquisition Corp
Performance |
| Timeline |
| Ellington Residential |
| Helix Acquisition Corp |
Ellington Residential and Helix Acquisition Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Ellington Residential and Helix Acquisition
The main advantage of trading using opposite Ellington Residential and Helix Acquisition positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Ellington Residential position performs unexpectedly, Helix Acquisition 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 Helix Acquisition will offset losses from the drop in Helix Acquisition's 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 |
| Helix Acquisition vs. Griffon | Helix Acquisition vs. Parker Hannifin | Helix Acquisition vs. NETGEAR | Helix Acquisition vs. Newpark Resources |
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 ETF Categories module to list of ETF categories grouped based on various criteria, such as the investment strategy or type of investments.
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