Correlation Between Manhattan Bridge and MFA Financial
Can any of the company-specific risk be diversified away by investing in both Manhattan Bridge and MFA Financial 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 Manhattan Bridge and MFA Financial into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Manhattan Bridge Capital and MFA Financial, you can compare the effects of market volatilities on Manhattan Bridge and MFA Financial 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 Manhattan Bridge with a short position of MFA Financial. Check out your portfolio center. Please also check ongoing floating volatility patterns of Manhattan Bridge and MFA Financial.
Diversification Opportunities for Manhattan Bridge and MFA Financial
0.75 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Manhattan and MFA is 0.75. Overlapping area represents the amount of risk that can be diversified away by holding Manhattan Bridge Capital and MFA Financial in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on MFA Financial and Manhattan Bridge 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 Manhattan Bridge Capital are associated (or correlated) with MFA Financial. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of MFA Financial has no effect on the direction of Manhattan Bridge i.e., Manhattan Bridge and MFA Financial go up and down completely randomly.
Pair Corralation between Manhattan Bridge and MFA Financial
Given the investment horizon of 90 days Manhattan Bridge is expected to generate 1.62 times less return on investment than MFA Financial. In addition to that, Manhattan Bridge is 1.28 times more volatile than MFA Financial. It trades about 0.04 of its total potential returns per unit of risk. MFA Financial is currently generating about 0.08 per unit of volatility. If you would invest 1,639 in MFA Financial on November 9, 2024 and sell it today you would earn a total of 833.00 from holding MFA Financial or generate 50.82% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Manhattan Bridge Capital vs. MFA Financial
Performance |
| Timeline |
| Manhattan Bridge Capital |
| MFA Financial |
Manhattan Bridge and MFA Financial Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Manhattan Bridge and MFA Financial
The main advantage of trading using opposite Manhattan Bridge and MFA Financial positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Manhattan Bridge position performs unexpectedly, MFA Financial 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 MFA Financial will offset losses from the drop in MFA Financial's long position.| Manhattan Bridge vs. Franklin BSP Realty | Manhattan Bridge vs. AGNC Investment Corp | Manhattan Bridge vs. Nexpoint Real Estate | Manhattan Bridge vs. Ladder Capital Corp |
| MFA Financial vs. MFA Financial | MFA Financial vs. ARMOUR Residential REIT | MFA Financial vs. Annaly Capital Management | MFA Financial vs. Two Harbors Investment |
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 Fundamental Analysis module to view fundamental data based on most recent published financial statements.
Other Complementary Tools
| Sync Your Broker Sync your existing holdings, watchlists, positions or portfolios from thousands of online brokerage services, banks, investment account aggregators and robo-advisors. | |
| Equity Search Search for actively traded equities including funds and ETFs from over 30 global markets | |
| Bonds Directory Find actively traded corporate debentures issued by US companies | |
| Financial Widgets Easily integrated Macroaxis content with over 30 different plug-and-play financial widgets | |
| Price Ceiling Movement Calculate and plot Price Ceiling Movement for different equity instruments |