Correlation Between Rithm Capital and Invesco Mortgage
Can any of the company-specific risk be diversified away by investing in both Rithm Capital and Invesco Mortgage 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 Invesco Mortgage 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 Invesco Mortgage Capital, you can compare the effects of market volatilities on Rithm Capital and Invesco Mortgage 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 Invesco Mortgage. Check out your portfolio center. Please also check ongoing floating volatility patterns of Rithm Capital and Invesco Mortgage.
Diversification Opportunities for Rithm Capital and Invesco Mortgage
0.29 | Correlation Coefficient |
Modest diversification
The 3 months correlation between Rithm and Invesco is 0.29. Overlapping area represents the amount of risk that can be diversified away by holding Rithm Capital Corp and Invesco Mortgage Capital in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Invesco Mortgage Capital 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 Invesco Mortgage. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Invesco Mortgage Capital has no effect on the direction of Rithm Capital i.e., Rithm Capital and Invesco Mortgage go up and down completely randomly.
Pair Corralation between Rithm Capital and Invesco Mortgage
Given the investment horizon of 90 days Rithm Capital Corp is expected to generate 0.79 times more return on investment than Invesco Mortgage. However, Rithm Capital Corp is 1.26 times less risky than Invesco Mortgage. It trades about 0.3 of its potential returns per unit of risk. Invesco Mortgage Capital is currently generating about 0.01 per unit of risk. If you would invest 1,047 in Rithm Capital Corp on August 27, 2024 and sell it today you would earn a total of 68.00 from holding Rithm Capital Corp or generate 6.49% 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. Invesco Mortgage Capital
Performance |
| Timeline |
| Rithm Capital Corp |
| Invesco Mortgage Capital |
Rithm Capital and Invesco Mortgage Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Rithm Capital and Invesco Mortgage
The main advantage of trading using opposite Rithm Capital and Invesco Mortgage positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Rithm Capital position performs unexpectedly, Invesco Mortgage 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 Invesco Mortgage will offset losses from the drop in Invesco Mortgage's long position.| Rithm Capital vs. Starwood Property Trust | Rithm Capital vs. AGNC Investment Corp | Rithm Capital vs. Blackstone Mortgage Trust | Rithm Capital vs. Ares Commercial Real |
| Invesco Mortgage vs. MFA Financial | Invesco Mortgage vs. Two Harbors Investments | Invesco Mortgage vs. New York Mortgage | Invesco Mortgage vs. ARMOUR Residential REIT |
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 Theme Ratings module to determine theme ratings based on digital equity recommendations. Macroaxis theme ratings are based on combination of fundamental analysis and risk-adjusted market performance.
Other Complementary Tools
| Sectors List of equity sectors categorizing publicly traded companies based on their primary business activities | |
| Portfolio Anywhere Track or share privately all of your investments from the convenience of any device | |
| Price Exposure Probability Analyze equity upside and downside potential for a given time horizon across multiple markets | |
| Headlines Timeline Stay connected to all market stories and filter out noise. Drill down to analyze hype elasticity | |
| Equity Search Search for actively traded equities including funds and ETFs from over 30 global markets |