Correlation Between Rithm Capital and Acres Commercial
Can any of the company-specific risk be diversified away by investing in both Rithm Capital and Acres Commercial 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 Rithm Capital and Acres Commercial into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Rithm Capital Corp and Acres Commercial Realty, you can compare the effects of market volatilities on Rithm Capital and Acres Commercial 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 Rithm Capital with a short position of Acres Commercial. Check out your portfolio center. Please also check ongoing floating volatility patterns of Rithm Capital and Acres Commercial.
Diversification Opportunities for Rithm Capital and Acres Commercial
0.25 | Correlation Coefficient |
Modest diversification
The 3 months correlation between Rithm and Acres is 0.25. Overlapping area represents the amount of risk that can be diversified away by holding Rithm Capital Corp and Acres Commercial Realty in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Acres Commercial Realty and Rithm 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 Rithm Capital Corp are associated (or correlated) with Acres Commercial. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Acres Commercial Realty has no effect on the direction of Rithm Capital i.e., Rithm Capital and Acres Commercial go up and down completely randomly.
Pair Corralation between Rithm Capital and Acres Commercial
Assuming the 90 days trading horizon Rithm Capital is expected to generate 4.98 times less return on investment than Acres Commercial. But when comparing it to its historical volatility, Rithm Capital Corp is 6.05 times less risky than Acres Commercial. It trades about 0.22 of its potential returns per unit of risk. Acres Commercial Realty is currently generating about 0.18 of returns per unit of risk over similar time horizon. If you would invest 1,257 in Acres Commercial Realty on August 24, 2024 and sell it today you would earn a total of 417.00 from holding Acres Commercial Realty or generate 33.17% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Rithm Capital Corp vs. Acres Commercial Realty
Performance |
| Timeline |
| Rithm Capital Corp |
| Acres Commercial Realty |
Rithm Capital and Acres Commercial Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Rithm Capital and Acres Commercial
The main advantage of trading using opposite Rithm Capital and Acres Commercial positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Rithm Capital position performs unexpectedly, Acres Commercial 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 Acres Commercial will offset losses from the drop in Acres Commercial's long position.| Rithm Capital vs. Rithm Capital Corp | Rithm Capital vs. Rithm Capital Corp | Rithm Capital vs. Rithm Capital Corp | Rithm Capital vs. PennyMac Mortgage Investment |
| Acres Commercial vs. Lument Finance Trust | Acres Commercial vs. AG Mortgage Investment | Acres Commercial vs. Rithm Capital Corp | Acres Commercial vs. Cherry Hill Mortgage |
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 Idea Analyzer module to analyze all characteristics, volatility and risk-adjusted return of Macroaxis ideas.
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