Correlation Between Necessity Retail and Sachem Capital
Can any of the company-specific risk be diversified away by investing in both Necessity Retail and Sachem 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 Necessity Retail and Sachem Capital into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Necessity Retail REIT and Sachem Capital Corp, you can compare the effects of market volatilities on Necessity Retail and Sachem 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 Necessity Retail with a short position of Sachem Capital. Check out your portfolio center. Please also check ongoing floating volatility patterns of Necessity Retail and Sachem Capital.
Diversification Opportunities for Necessity Retail and Sachem Capital
0.0 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between Necessity and Sachem is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding Necessity Retail REIT and Sachem Capital Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Sachem Capital Corp and Necessity Retail 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 Necessity Retail REIT are associated (or correlated) with Sachem Capital. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Sachem Capital Corp has no effect on the direction of Necessity Retail i.e., Necessity Retail and Sachem Capital go up and down completely randomly.
Pair Corralation between Necessity Retail and Sachem Capital
Assuming the 90 days horizon Necessity Retail REIT is expected to under-perform the Sachem Capital. But the preferred stock apears to be less risky and, when comparing its historical volatility, Necessity Retail REIT is 1.24 times less risky than Sachem Capital. The preferred stock trades about -0.03 of its potential returns per unit of risk. The Sachem Capital Corp is currently generating about 0.0 of returns per unit of risk over similar time horizon. If you would invest 1,912 in Sachem Capital Corp on November 5, 2024 and sell it today you would lose (111.00) from holding Sachem Capital Corp or give up 5.81% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Flat |
| Strength | Insignificant |
| Accuracy | 22.27% |
| Values | Daily Returns |
Necessity Retail REIT vs. Sachem Capital Corp
Performance |
| Timeline |
| Necessity Retail REIT |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
| Sachem Capital Corp |
Necessity Retail and Sachem Capital Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Necessity Retail and Sachem Capital
The main advantage of trading using opposite Necessity Retail and Sachem Capital positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Necessity Retail position performs unexpectedly, Sachem 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 Sachem Capital will offset losses from the drop in Sachem Capital's long position.| Necessity Retail vs. SiriusPoint | Necessity Retail vs. RLJ Lodging Trust | Necessity Retail vs. New York Mortgage | Necessity Retail vs. Global Net Lease |
| Sachem Capital vs. SiriusPoint | Sachem Capital vs. Harrow Health 8625 | Sachem Capital vs. XOMA Corporation | Sachem Capital vs. New York 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 Commodity Directory module to find actively traded commodities issued by global exchanges.
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