Correlation Between ELLINGTON FINL and ATRIUM MORTGAGE
Can any of the company-specific risk be diversified away by investing in both ELLINGTON FINL and ATRIUM 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 ELLINGTON FINL and ATRIUM MORTGAGE into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between ELLINGTON FINL INC and ATRIUM MORTGAGE INVESTM, you can compare the effects of market volatilities on ELLINGTON FINL and ATRIUM 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 ELLINGTON FINL with a short position of ATRIUM MORTGAGE. Check out your portfolio center. Please also check ongoing floating volatility patterns of ELLINGTON FINL and ATRIUM MORTGAGE.
Diversification Opportunities for ELLINGTON FINL and ATRIUM MORTGAGE
0.55 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between ELLINGTON and ATRIUM is 0.55. Overlapping area represents the amount of risk that can be diversified away by holding ELLINGTON FINL INC and ATRIUM MORTGAGE INVESTM in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on ATRIUM MORTGAGE INVESTM and ELLINGTON FINL 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 ELLINGTON FINL INC are associated (or correlated) with ATRIUM MORTGAGE. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of ATRIUM MORTGAGE INVESTM has no effect on the direction of ELLINGTON FINL i.e., ELLINGTON FINL and ATRIUM MORTGAGE go up and down completely randomly.
Pair Corralation between ELLINGTON FINL and ATRIUM MORTGAGE
Assuming the 90 days horizon ELLINGTON FINL INC is expected to generate 0.23 times more return on investment than ATRIUM MORTGAGE. However, ELLINGTON FINL INC is 4.31 times less risky than ATRIUM MORTGAGE. It trades about -0.04 of its potential returns per unit of risk. ATRIUM MORTGAGE INVESTM is currently generating about -0.06 per unit of risk. If you would invest 1,167 in ELLINGTON FINL INC on September 25, 2024 and sell it today you would lose (7.00) from holding ELLINGTON FINL INC or give up 0.6% of portfolio value over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Together |
Strength | Weak |
Accuracy | 95.45% |
Values | Daily Returns |
ELLINGTON FINL INC vs. ATRIUM MORTGAGE INVESTM
Performance |
Timeline |
ELLINGTON FINL INC |
ATRIUM MORTGAGE INVESTM |
ELLINGTON FINL and ATRIUM MORTGAGE Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with ELLINGTON FINL and ATRIUM MORTGAGE
The main advantage of trading using opposite ELLINGTON FINL and ATRIUM MORTGAGE positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if ELLINGTON FINL position performs unexpectedly, ATRIUM 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 ATRIUM MORTGAGE will offset losses from the drop in ATRIUM MORTGAGE's long position.ELLINGTON FINL vs. Mr Cooper Group | ELLINGTON FINL vs. OSB GROUP PLC | ELLINGTON FINL vs. FIRST NATIONAL FIN | ELLINGTON FINL vs. Deutsche Pfandbriefbank AG |
ATRIUM MORTGAGE vs. Mr Cooper Group | ATRIUM MORTGAGE vs. OSB GROUP PLC | ATRIUM MORTGAGE vs. FIRST NATIONAL FIN | ATRIUM MORTGAGE vs. Deutsche Pfandbriefbank AG |
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.
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