Correlation Between New York and Cherry Hill
Can any of the company-specific risk be diversified away by investing in both New York 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 New York and Cherry Hill 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 Cherry Hill Mortgage, you can compare the effects of market volatilities on New York 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 New York with a short position of Cherry Hill. Check out your portfolio center. Please also check ongoing floating volatility patterns of New York and Cherry Hill.
Diversification Opportunities for New York and Cherry Hill
0.65 | Correlation Coefficient |
Poor diversification
The 3 months correlation between New and Cherry is 0.65. Overlapping area represents the amount of risk that can be diversified away by holding New York Mortgage 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 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 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 New York i.e., New York and Cherry Hill go up and down completely randomly.
Pair Corralation between New York and Cherry Hill
Assuming the 90 days horizon New York Mortgage is expected to generate 0.67 times more return on investment than Cherry Hill. However, New York Mortgage is 1.5 times less risky than Cherry Hill. It trades about -0.06 of its potential returns per unit of risk. Cherry Hill Mortgage is currently generating about -0.29 per unit of risk. If you would invest 2,008 in New York Mortgage on August 27, 2024 and sell it today you would lose (28.00) from holding New York Mortgage or give up 1.39% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
New York Mortgage vs. Cherry Hill Mortgage
Performance |
| Timeline |
| New York Mortgage |
| Cherry Hill Mortgage |
New York and Cherry Hill Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with New York and Cherry Hill
The main advantage of trading using opposite New York and Cherry Hill positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if New York 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.| New York vs. New York Mortgage | New York vs. New York Mortgage | New York vs. New York Mortgage | New York vs. PennyMac Mortgage Investment |
| Cherry Hill vs. Chimera Investment | Cherry Hill vs. Chimera Investment | Cherry Hill vs. Chimera Investment | 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 ETFs module to find actively traded Exchange Traded Funds (ETF) from around the world.
Other Complementary Tools
| Global Correlations Find global opportunities by holding instruments from different markets | |
| Money Flow Index Determine momentum by analyzing Money Flow Index and other technical indicators | |
| Odds Of Bankruptcy Get analysis of equity chance of financial distress in the next 2 years | |
| Stock Screener Find equities using a custom stock filter or screen asymmetry in trading patterns, price, volume, or investment outlook. | |
| Headlines Timeline Stay connected to all market stories and filter out noise. Drill down to analyze hype elasticity |