Correlation Between Ready Capital and New York
Can any of the company-specific risk be diversified away by investing in both Ready Capital and New York 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 New York 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 New York Mortgage, you can compare the effects of market volatilities on Ready Capital and New York 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 New York. Check out your portfolio center. Please also check ongoing floating volatility patterns of Ready Capital and New York.
Diversification Opportunities for Ready Capital and New York
-0.43 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Ready and New is -0.43. Overlapping area represents the amount of risk that can be diversified away by holding Ready Capital Corp and New York Mortgage in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on New York Mortgage 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 New York. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of New York Mortgage has no effect on the direction of Ready Capital i.e., Ready Capital and New York go up and down completely randomly.
Pair Corralation between Ready Capital and New York
Allowing for the 90-day total investment horizon Ready Capital Corp is expected to under-perform the New York. In addition to that, Ready Capital is 3.87 times more volatile than New York Mortgage. It trades about 0.0 of its total potential returns per unit of risk. New York Mortgage is currently generating about 0.08 per unit of volatility. If you would invest 2,437 in New York Mortgage on August 28, 2024 and sell it today you would earn a total of 92.00 from holding New York Mortgage or generate 3.78% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 83.2% |
| Values | Daily Returns |
Ready Capital Corp vs. New York Mortgage
Performance |
| Timeline |
| Ready Capital Corp |
| New York Mortgage |
Ready Capital and New York Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Ready Capital and New York
The main advantage of trading using opposite Ready Capital and New York positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Ready Capital position performs unexpectedly, New York 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 New York will offset losses from the drop in New York's long position.| Ready Capital vs. Blackstone Mortgage Trust | Ready Capital vs. Omega Healthcare Investors | Ready Capital vs. Medical Properties Trust |
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 Efficient Frontier module to plot and analyze your portfolio and positions against risk-return landscape of the market..
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