Correlation Between Ladder Capital and Cherry Hill
Can any of the company-specific risk be diversified away by investing in both Ladder Capital and Cherry Hill 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 Ladder Capital and Cherry Hill into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Ladder Capital Corp and Cherry Hill Mortgage, you can compare the effects of market volatilities on Ladder Capital and Cherry Hill 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 Ladder Capital with a short position of Cherry Hill. Check out your portfolio center. Please also check ongoing floating volatility patterns of Ladder Capital and Cherry Hill.
Diversification Opportunities for Ladder Capital and Cherry Hill
-0.63 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Ladder and Cherry is -0.63. Overlapping area represents the amount of risk that can be diversified away by holding Ladder Capital Corp and Cherry Hill Mortgage in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Cherry Hill Mortgage and Ladder Capital 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 Ladder Capital Corp are associated (or correlated) with Cherry Hill. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Cherry Hill Mortgage has no effect on the direction of Ladder Capital i.e., Ladder Capital and Cherry Hill go up and down completely randomly.
Pair Corralation between Ladder Capital and Cherry Hill
Given the investment horizon of 90 days Ladder Capital Corp is expected to generate 1.84 times more return on investment than Cherry Hill. However, Ladder Capital is 1.84 times more volatile than Cherry Hill Mortgage. It trades about 0.04 of its potential returns per unit of risk. Cherry Hill Mortgage is currently generating about 0.08 per unit of risk. If you would invest 887.00 in Ladder Capital Corp on August 27, 2024 and sell it today you would earn a total of 283.00 from holding Ladder Capital Corp or generate 31.91% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Ladder Capital Corp vs. Cherry Hill Mortgage
Performance |
| Timeline |
| Ladder Capital Corp |
| Cherry Hill Mortgage |
Ladder Capital and Cherry Hill Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Ladder Capital and Cherry Hill
The main advantage of trading using opposite Ladder Capital and Cherry Hill positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Ladder Capital position performs unexpectedly, Cherry Hill 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 Cherry Hill will offset losses from the drop in Cherry Hill's long position.| Ladder Capital vs. KKR Real Estate | Ladder Capital vs. Ares Commercial Real | Ladder Capital vs. Ellington Residential Mortgage | Ladder Capital vs. Claros Mortgage Trust |
| Cherry Hill vs. Annaly Capital Management | Cherry Hill vs. AGNC Investment Corp | Cherry Hill vs. Invesco Mortgage Capital | Cherry Hill vs. Invesco Mortgage Capital |
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 Money Managers module to screen money managers from public funds and ETFs managed around the world.
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