Correlation Between Ready Capital and Ladenburg Thalmann
Can any of the company-specific risk be diversified away by investing in both Ready Capital and Ladenburg Thalmann 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 Ready Capital and Ladenburg Thalmann into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Ready Capital Corp and Ladenburg Thalmann Financial, you can compare the effects of market volatilities on Ready Capital and Ladenburg Thalmann 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 Ready Capital with a short position of Ladenburg Thalmann. Check out your portfolio center. Please also check ongoing floating volatility patterns of Ready Capital and Ladenburg Thalmann.
Diversification Opportunities for Ready Capital and Ladenburg Thalmann
-0.23 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Ready and Ladenburg is -0.23. Overlapping area represents the amount of risk that can be diversified away by holding Ready Capital Corp and Ladenburg Thalmann Financial in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Ladenburg Thalmann and Ready 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 Ready Capital Corp are associated (or correlated) with Ladenburg Thalmann. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Ladenburg Thalmann has no effect on the direction of Ready Capital i.e., Ready Capital and Ladenburg Thalmann go up and down completely randomly.
Pair Corralation between Ready Capital and Ladenburg Thalmann
Allowing for the 90-day total investment horizon Ready Capital Corp is expected to under-perform the Ladenburg Thalmann. But the stock apears to be less risky and, when comparing its historical volatility, Ready Capital Corp is 2.1 times less risky than Ladenburg Thalmann. The stock trades about -0.01 of its potential returns per unit of risk. The Ladenburg Thalmann Financial is currently generating about 0.02 of returns per unit of risk over similar time horizon. If you would invest 1,750 in Ladenburg Thalmann Financial on September 12, 2024 and sell it today you would lose (40.00) from holding Ladenburg Thalmann Financial or give up 2.29% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 29.09% |
| Values | Daily Returns |
Ready Capital Corp vs. Ladenburg Thalmann Financial
Performance |
| Timeline |
| Ready Capital Corp |
| Ladenburg Thalmann |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
Ready Capital and Ladenburg Thalmann Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Ready Capital and Ladenburg Thalmann
The main advantage of trading using opposite Ready Capital and Ladenburg Thalmann positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Ready Capital position performs unexpectedly, Ladenburg Thalmann 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 Ladenburg Thalmann will offset losses from the drop in Ladenburg Thalmann's long position.| Ready Capital vs. Ellington Residential Mortgage | Ready Capital vs. Ellington Financial | Ready Capital vs. Dynex Capital | Ready Capital vs. Orchid Island 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 Stocks Directory module to find actively traded stocks across global markets.
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