Correlation Between Granite Point and Granite Point
Can any of the company-specific risk be diversified away by investing in both Granite Point and Granite Point 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 Granite Point 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 Granite Point Mortgage, you can compare the effects of market volatilities on Granite Point and Granite Point 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 Granite Point. Check out your portfolio center. Please also check ongoing floating volatility patterns of Granite Point and Granite Point.
Diversification Opportunities for Granite Point and Granite Point
0.93 | Correlation Coefficient |
Almost no diversification
The 3 months correlation between Granite and Granite is 0.93. Overlapping area represents the amount of risk that can be diversified away by holding Granite Point Mortgage and Granite Point Mortgage in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Granite Point Mortgage 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 Granite Point. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Granite Point Mortgage has no effect on the direction of Granite Point i.e., Granite Point and Granite Point go up and down completely randomly.
Pair Corralation between Granite Point and Granite Point
Given the investment horizon of 90 days Granite Point Mortgage is expected to under-perform the Granite Point. In addition to that, Granite Point is 2.76 times more volatile than Granite Point Mortgage. It trades about -0.03 of its total potential returns per unit of risk. Granite Point Mortgage is currently generating about 0.07 per unit of volatility. If you would invest 1,486 in Granite Point Mortgage on August 24, 2024 and sell it today you would earn a total of 269.00 from holding Granite Point Mortgage or generate 18.1% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Granite Point Mortgage vs. Granite Point Mortgage
Performance |
| Timeline |
| Granite Point Mortgage |
| Granite Point Mortgage |
Granite Point and Granite Point Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Granite Point and Granite Point
The main advantage of trading using opposite Granite Point and Granite Point positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Granite Point position performs unexpectedly, Granite Point 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 Granite Point will offset losses from the drop in Granite Point's long position.| Granite Point vs. MFA Financial | Granite Point vs. Angel Oak Mortgage | Granite Point vs. Two Harbors Investments | Granite Point vs. PennyMac Mortgage Investment |
| Granite Point vs. PennyMac Mortgage Investment | Granite Point vs. Rithm Capital Corp | Granite Point vs. ARMOUR Residential REIT | Granite Point vs. MFA Financial |
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 Correlation Analysis module to reduce portfolio risk simply by holding instruments which are not perfectly correlated.
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