Correlation Between Granite Point and ACRES Commercial
Can any of the company-specific risk be diversified away by investing in both Granite Point and ACRES Commercial 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 Granite Point and ACRES Commercial into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Granite Point Mortgage and ACRES Commercial Realty, you can compare the effects of market volatilities on Granite Point and ACRES Commercial 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 Granite Point with a short position of ACRES Commercial. Check out your portfolio center. Please also check ongoing floating volatility patterns of Granite Point and ACRES Commercial.
Diversification Opportunities for Granite Point and ACRES Commercial
-0.46 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Granite and ACRES is -0.46. Overlapping area represents the amount of risk that can be diversified away by holding Granite Point Mortgage and ACRES Commercial Realty in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on ACRES Commercial Realty and Granite Point 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 Granite Point Mortgage are associated (or correlated) with ACRES Commercial. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of ACRES Commercial Realty has no effect on the direction of Granite Point i.e., Granite Point and ACRES Commercial go up and down completely randomly.
Pair Corralation between Granite Point and ACRES Commercial
Assuming the 90 days trading horizon Granite Point is expected to generate 1.61 times less return on investment than ACRES Commercial. But when comparing it to its historical volatility, Granite Point Mortgage is 1.26 times less risky than ACRES Commercial. It trades about 0.04 of its potential returns per unit of risk. ACRES Commercial Realty is currently generating about 0.05 of returns per unit of risk over similar time horizon. If you would invest 1,721 in ACRES Commercial Realty on November 9, 2024 and sell it today you would earn a total of 514.00 from holding ACRES Commercial Realty or generate 29.87% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Granite Point Mortgage vs. ACRES Commercial Realty
Performance |
| Timeline |
| Granite Point Mortgage |
| ACRES Commercial Realty |
Granite Point and ACRES Commercial Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Granite Point and ACRES Commercial
The main advantage of trading using opposite Granite Point and ACRES Commercial positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Granite Point position performs unexpectedly, ACRES Commercial 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 ACRES Commercial will offset losses from the drop in ACRES Commercial's long position.| Granite Point vs. PennyMac Mortgage Investment | Granite Point vs. Rithm Capital Corp | Granite Point vs. ARMOUR Residential REIT | Granite Point vs. MFA Financial |
| ACRES Commercial vs. ACRES Commercial Realty | ACRES Commercial vs. Arbor Realty Trust | ACRES Commercial vs. Arbor Realty 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 Crypto Correlations module to use cryptocurrency correlation module to diversify your cryptocurrency portfolio across multiple coins.
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