Correlation Between Chicago Atlantic and Veltex
Can any of the company-specific risk be diversified away by investing in both Chicago Atlantic and Veltex 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 Veltex 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 Veltex, you can compare the effects of market volatilities on Chicago Atlantic and Veltex 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 Veltex. Check out your portfolio center. Please also check ongoing floating volatility patterns of Chicago Atlantic and Veltex.
Diversification Opportunities for Chicago Atlantic and Veltex
-0.56 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Chicago and Veltex is -0.56. Overlapping area represents the amount of risk that can be diversified away by holding Chicago Atlantic Real and Veltex in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Veltex 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 Veltex. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Veltex has no effect on the direction of Chicago Atlantic i.e., Chicago Atlantic and Veltex go up and down completely randomly.
Pair Corralation between Chicago Atlantic and Veltex
Given the investment horizon of 90 days Chicago Atlantic Real is expected to generate 0.11 times more return on investment than Veltex. However, Chicago Atlantic Real is 9.52 times less risky than Veltex. It trades about -0.14 of its potential returns per unit of risk. Veltex is currently generating about -0.07 per unit of risk. If you would invest 1,552 in Chicago Atlantic Real on October 16, 2024 and sell it today you would lose (34.00) from holding Chicago Atlantic Real or give up 2.19% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 94.74% |
| Values | Daily Returns |
Chicago Atlantic Real vs. Veltex
Performance |
| Timeline |
| Chicago Atlantic Real |
| Veltex |
Chicago Atlantic and Veltex Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Chicago Atlantic and Veltex
The main advantage of trading using opposite Chicago Atlantic and Veltex positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Chicago Atlantic position performs unexpectedly, Veltex 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 Veltex will offset losses from the drop in Veltex's long position.| Chicago Atlantic vs. KKR Real Estate | Chicago Atlantic vs. Ellington Residential Mortgage | Chicago Atlantic vs. Claros Mortgage Trust | Chicago Atlantic vs. Ares Commercial Real |
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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 Price Exposure Probability module to analyze equity upside and downside potential for a given time horizon across multiple markets.
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