Correlation Between Ellington Financial and AJX Old
Can any of the company-specific risk be diversified away by investing in both Ellington Financial and AJX Old 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 Financial and AJX Old into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Ellington Financial and AJX Old, you can compare the effects of market volatilities on Ellington Financial and AJX Old 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 Financial with a short position of AJX Old. Check out your portfolio center. Please also check ongoing floating volatility patterns of Ellington Financial and AJX Old.
Diversification Opportunities for Ellington Financial and AJX Old
-0.46 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Ellington and AJX is -0.46. Overlapping area represents the amount of risk that can be diversified away by holding Ellington Financial and AJX Old in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on AJX Old and Ellington Financial 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 Financial are associated (or correlated) with AJX Old. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of AJX Old has no effect on the direction of Ellington Financial i.e., Ellington Financial and AJX Old go up and down completely randomly.
Pair Corralation between Ellington Financial and AJX Old
If you would invest 1,211 in Ellington Financial on November 5, 2024 and sell it today you would earn a total of 45.00 from holding Ellington Financial or generate 3.72% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 5.0% |
| Values | Daily Returns |
Ellington Financial vs. AJX Old
Performance |
| Timeline |
| Ellington Financial |
| AJX Old |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Good
Ellington Financial and AJX Old Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Ellington Financial and AJX Old
The main advantage of trading using opposite Ellington Financial and AJX Old positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Ellington Financial position performs unexpectedly, AJX Old 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 AJX Old will offset losses from the drop in AJX Old's long position.| Ellington Financial vs. Ellington Residential Mortgage | Ellington Financial vs. Orchid Island Capital | Ellington Financial vs. ARMOUR Residential REIT | Ellington Financial vs. Dynex Capital |
| AJX Old vs. Ellington Financial | AJX Old vs. Dynex Capital | AJX Old vs. Ares Commercial Real | AJX Old vs. Cherry Hill Mortgage |
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 Cryptocurrency Center module to build and monitor diversified portfolio of extremely risky digital assets and cryptocurrency.
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