Correlation Between Chicago Atlantic and Rithm Capital
Can any of the company-specific risk be diversified away by investing in both Chicago Atlantic and Rithm Capital 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 Chicago Atlantic and Rithm Capital into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Chicago Atlantic Real and Rithm Capital Corp, you can compare the effects of market volatilities on Chicago Atlantic and Rithm Capital 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 Chicago Atlantic with a short position of Rithm Capital. Check out your portfolio center. Please also check ongoing floating volatility patterns of Chicago Atlantic and Rithm Capital.
Diversification Opportunities for Chicago Atlantic and Rithm Capital
0.42 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Chicago and Rithm is 0.42. Overlapping area represents the amount of risk that can be diversified away by holding Chicago Atlantic Real and Rithm Capital Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Rithm Capital Corp and Chicago Atlantic 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 Chicago Atlantic Real are associated (or correlated) with Rithm Capital. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Rithm Capital Corp has no effect on the direction of Chicago Atlantic i.e., Chicago Atlantic and Rithm Capital go up and down completely randomly.
Pair Corralation between Chicago Atlantic and Rithm Capital
Given the investment horizon of 90 days Chicago Atlantic is expected to generate 1.29 times less return on investment than Rithm Capital. In addition to that, Chicago Atlantic is 1.39 times more volatile than Rithm Capital Corp. It trades about 0.05 of its total potential returns per unit of risk. Rithm Capital Corp is currently generating about 0.09 per unit of volatility. If you would invest 1,735 in Rithm Capital Corp on August 23, 2024 and sell it today you would earn a total of 794.00 from holding Rithm Capital Corp or generate 45.76% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Chicago Atlantic Real vs. Rithm Capital Corp
Performance |
| Timeline |
| Chicago Atlantic Real |
| Rithm Capital Corp |
Chicago Atlantic and Rithm Capital Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Chicago Atlantic and Rithm Capital
The main advantage of trading using opposite Chicago Atlantic and Rithm Capital positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Chicago Atlantic position performs unexpectedly, Rithm Capital 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 Rithm Capital will offset losses from the drop in Rithm Capital's long position.| Chicago Atlantic vs. KKR Real Estate | Chicago Atlantic vs. Ellington Residential Mortgage | Chicago Atlantic vs. Claros Mortgage Trust | Chicago Atlantic vs. Great Ajax Corp |
| Rithm Capital vs. Rithm Capital Corp | Rithm Capital vs. Rithm Capital Corp | Rithm Capital vs. Rithm Capital Corp | Rithm Capital vs. PennyMac Mortgage 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 Fundamentals Comparison module to compare fundamentals across multiple equities to find investing opportunities.
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