Correlation Between Ellington Financial and Global Star
Can any of the company-specific risk be diversified away by investing in both Ellington Financial and Global Star 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 Global Star into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Ellington Financial and Global Star Acquisition,, you can compare the effects of market volatilities on Ellington Financial and Global Star 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 Global Star. Check out your portfolio center. Please also check ongoing floating volatility patterns of Ellington Financial and Global Star.
Diversification Opportunities for Ellington Financial and Global Star
-0.69 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Ellington and Global is -0.69. Overlapping area represents the amount of risk that can be diversified away by holding Ellington Financial and Global Star Acquisition, in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Global Star Acquisition, 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 Global Star. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Global Star Acquisition, has no effect on the direction of Ellington Financial i.e., Ellington Financial and Global Star go up and down completely randomly.
Pair Corralation between Ellington Financial and Global Star
Considering the 90-day investment horizon Ellington Financial is expected to generate 0.99 times more return on investment than Global Star. However, Ellington Financial is 1.01 times less risky than Global Star. It trades about 0.07 of its potential returns per unit of risk. Global Star Acquisition, is currently generating about 0.02 per unit of risk. If you would invest 1,143 in Ellington Financial on September 3, 2024 and sell it today you would earn a total of 94.00 from holding Ellington Financial or generate 8.22% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Ellington Financial vs. Global Star Acquisition,
Performance |
| Timeline |
| Ellington Financial |
| Global Star Acquisition, |
Ellington Financial and Global Star Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Ellington Financial and Global Star
The main advantage of trading using opposite Ellington Financial and Global Star positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Ellington Financial position performs unexpectedly, Global Star 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 Global Star will offset losses from the drop in Global Star'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 |
| Global Star vs. Alpha One | Global Star vs. Manaris Corp | Global Star vs. SCOR PK | Global Star vs. Aquagold International |
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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