Correlation Between New York and Chimera Investment
Can any of the company-specific risk be diversified away by investing in both New York and Chimera Investment 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 New York and Chimera Investment into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between New York Mortgage and Chimera Investment, you can compare the effects of market volatilities on New York and Chimera Investment 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 New York with a short position of Chimera Investment. Check out your portfolio center. Please also check ongoing floating volatility patterns of New York and Chimera Investment.
Diversification Opportunities for New York and Chimera Investment
-0.26 | Correlation Coefficient |
Very good diversification
The 3 months correlation between New and Chimera is -0.26. Overlapping area represents the amount of risk that can be diversified away by holding New York Mortgage and Chimera Investment in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Chimera Investment and New York 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 New York Mortgage are associated (or correlated) with Chimera Investment. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Chimera Investment has no effect on the direction of New York i.e., New York and Chimera Investment go up and down completely randomly.
Pair Corralation between New York and Chimera Investment
Assuming the 90 days horizon New York Mortgage is expected to under-perform the Chimera Investment. In addition to that, New York is 1.67 times more volatile than Chimera Investment. It trades about -0.06 of its total potential returns per unit of risk. Chimera Investment is currently generating about -0.02 per unit of volatility. If you would invest 2,323 in Chimera Investment on November 3, 2024 and sell it today you would lose (7.00) from holding Chimera Investment or give up 0.3% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
New York Mortgage vs. Chimera Investment
Performance |
| Timeline |
| New York Mortgage |
| Chimera Investment |
New York and Chimera Investment Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with New York and Chimera Investment
The main advantage of trading using opposite New York and Chimera Investment positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if New York position performs unexpectedly, Chimera Investment 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 Chimera Investment will offset losses from the drop in Chimera Investment's long position.| New York vs. NexPoint Real Estate | New York vs. TPG RE Finance | New York vs. New York Mortgage | New York vs. New York Mortgage |
| Chimera Investment vs. Chimera Investment | Chimera Investment vs. PennyMac Mortgage Investment | Chimera Investment vs. PennyMac Mortgage Investment | Chimera Investment 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 Stock Tickers module to use high-impact, comprehensive, and customizable stock tickers that can be easily integrated to any websites.
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