Correlation Between Ladder Capital and Franklin BSP
Can any of the company-specific risk be diversified away by investing in both Ladder Capital and Franklin BSP 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 Franklin BSP 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 Franklin BSP Realty, you can compare the effects of market volatilities on Ladder Capital and Franklin BSP 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 Franklin BSP. Check out your portfolio center. Please also check ongoing floating volatility patterns of Ladder Capital and Franklin BSP.
Diversification Opportunities for Ladder Capital and Franklin BSP
0.36 | Correlation Coefficient |
Weak diversification
The 3 months correlation between Ladder and Franklin is 0.36. Overlapping area represents the amount of risk that can be diversified away by holding Ladder Capital Corp and Franklin BSP Realty in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Franklin BSP Realty 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 Franklin BSP. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Franklin BSP Realty has no effect on the direction of Ladder Capital i.e., Ladder Capital and Franklin BSP go up and down completely randomly.
Pair Corralation between Ladder Capital and Franklin BSP
Given the investment horizon of 90 days Ladder Capital Corp is expected to generate 1.06 times more return on investment than Franklin BSP. However, Ladder Capital is 1.06 times more volatile than Franklin BSP Realty. It trades about 0.16 of its potential returns per unit of risk. Franklin BSP Realty is currently generating about 0.0 per unit of risk. If you would invest 1,129 in Ladder Capital Corp on August 28, 2024 and sell it today you would earn a total of 43.00 from holding Ladder Capital Corp or generate 3.81% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Ladder Capital Corp vs. Franklin BSP Realty
Performance |
| Timeline |
| Ladder Capital Corp |
| Franklin BSP Realty |
Ladder Capital and Franklin BSP Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Ladder Capital and Franklin BSP
The main advantage of trading using opposite Ladder Capital and Franklin BSP positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Ladder Capital position performs unexpectedly, Franklin BSP 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 Franklin BSP will offset losses from the drop in Franklin BSP'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 |
| Franklin BSP vs. AGNC Investment Corp | Franklin BSP vs. Aquagold International | Franklin BSP vs. Morningstar Unconstrained Allocation | Franklin BSP vs. Thrivent High Yield |
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 Idea Optimizer module to use advanced portfolio builder with pre-computed micro ideas to build optimal portfolio .
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