Correlation Between Sachem Capital and Cherry Hill
Can any of the company-specific risk be diversified away by investing in both Sachem Capital and Cherry Hill 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 Sachem Capital and Cherry Hill into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Sachem Capital Corp and Cherry Hill Mortgage, you can compare the effects of market volatilities on Sachem Capital and Cherry Hill 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 Sachem Capital with a short position of Cherry Hill. Check out your portfolio center. Please also check ongoing floating volatility patterns of Sachem Capital and Cherry Hill.
Diversification Opportunities for Sachem Capital and Cherry Hill
0.16 | Correlation Coefficient |
Average diversification
The 3 months correlation between Sachem and Cherry is 0.16. Overlapping area represents the amount of risk that can be diversified away by holding Sachem Capital Corp and Cherry Hill Mortgage in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Cherry Hill Mortgage and Sachem 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 Sachem Capital Corp are associated (or correlated) with Cherry Hill. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Cherry Hill Mortgage has no effect on the direction of Sachem Capital i.e., Sachem Capital and Cherry Hill go up and down completely randomly.
Pair Corralation between Sachem Capital and Cherry Hill
Given the investment horizon of 90 days Sachem Capital Corp is expected to under-perform the Cherry Hill. In addition to that, Sachem Capital is 3.6 times more volatile than Cherry Hill Mortgage. It trades about -0.05 of its total potential returns per unit of risk. Cherry Hill Mortgage is currently generating about 0.11 per unit of volatility. If you would invest 1,812 in Cherry Hill Mortgage on August 31, 2024 and sell it today you would earn a total of 565.00 from holding Cherry Hill Mortgage or generate 31.18% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Sachem Capital Corp vs. Cherry Hill Mortgage
Performance |
| Timeline |
| Sachem Capital Corp |
| Cherry Hill Mortgage |
Sachem Capital and Cherry Hill Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Sachem Capital and Cherry Hill
The main advantage of trading using opposite Sachem Capital and Cherry Hill positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Sachem Capital position performs unexpectedly, Cherry Hill 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 Cherry Hill will offset losses from the drop in Cherry Hill's long position.| Sachem Capital vs. Apollo Commercial Real | Sachem Capital vs. Ready Capital Corp | Sachem Capital vs. Ellington Residential Mortgage | Sachem Capital vs. KKR Real Estate |
| Cherry Hill vs. ACRES Commercial Realty | Cherry Hill vs. Chimera Investment | Cherry Hill 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 Commodity Channel module to use Commodity Channel Index to analyze current equity momentum.
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