Correlation Between Ellington Financial and Manhattan Bridge
Can any of the company-specific risk be diversified away by investing in both Ellington Financial and Manhattan Bridge 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 Manhattan Bridge into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Ellington Financial and Manhattan Bridge Capital, you can compare the effects of market volatilities on Ellington Financial and Manhattan Bridge 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 Manhattan Bridge. Check out your portfolio center. Please also check ongoing floating volatility patterns of Ellington Financial and Manhattan Bridge.
Diversification Opportunities for Ellington Financial and Manhattan Bridge
-0.57 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Ellington and Manhattan is -0.57. Overlapping area represents the amount of risk that can be diversified away by holding Ellington Financial and Manhattan Bridge Capital in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Manhattan Bridge Capital 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 Manhattan Bridge. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Manhattan Bridge Capital has no effect on the direction of Ellington Financial i.e., Ellington Financial and Manhattan Bridge go up and down completely randomly.
Pair Corralation between Ellington Financial and Manhattan Bridge
Considering the 90-day investment horizon Ellington Financial is expected to generate 1.16 times more return on investment than Manhattan Bridge. However, Ellington Financial is 1.16 times more volatile than Manhattan Bridge Capital. It trades about 0.04 of its potential returns per unit of risk. Manhattan Bridge Capital is currently generating about -0.27 per unit of risk. If you would invest 1,238 in Ellington Financial on August 28, 2024 and sell it today you would earn a total of 10.00 from holding Ellington Financial or generate 0.81% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Ellington Financial vs. Manhattan Bridge Capital
Performance |
| Timeline |
| Ellington Financial |
| Manhattan Bridge Capital |
Ellington Financial and Manhattan Bridge Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Ellington Financial and Manhattan Bridge
The main advantage of trading using opposite Ellington Financial and Manhattan Bridge positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Ellington Financial position performs unexpectedly, Manhattan Bridge 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 Manhattan Bridge will offset losses from the drop in Manhattan Bridge'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 |
| Manhattan Bridge vs. Franklin BSP Realty | Manhattan Bridge vs. AGNC Investment Corp | Manhattan Bridge vs. Nexpoint Real Estate | Manhattan Bridge vs. Great Ajax Corp |
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 My Watchlist Analysis module to analyze my current watchlist and to refresh optimization strategy. Macroaxis watchlist is based on self-learning algorithm to remember stocks you like.
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