Correlation Between ACRES Commercial and Ellington Financial
Can any of the company-specific risk be diversified away by investing in both ACRES Commercial and Ellington Financial 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 ACRES Commercial and Ellington Financial into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between ACRES Commercial Realty and Ellington Financial, you can compare the effects of market volatilities on ACRES Commercial and Ellington Financial 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 ACRES Commercial with a short position of Ellington Financial. Check out your portfolio center. Please also check ongoing floating volatility patterns of ACRES Commercial and Ellington Financial.
Diversification Opportunities for ACRES Commercial and Ellington Financial
0.76 | Correlation Coefficient |
Poor diversification
The 3 months correlation between ACRES and Ellington is 0.76. Overlapping area represents the amount of risk that can be diversified away by holding ACRES Commercial Realty and Ellington Financial in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Ellington Financial and ACRES Commercial 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 ACRES Commercial Realty are associated (or correlated) with Ellington Financial. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Ellington Financial has no effect on the direction of ACRES Commercial i.e., ACRES Commercial and Ellington Financial go up and down completely randomly.
Pair Corralation between ACRES Commercial and Ellington Financial
Assuming the 90 days trading horizon ACRES Commercial Realty is expected to generate 0.92 times more return on investment than Ellington Financial. However, ACRES Commercial Realty is 1.09 times less risky than Ellington Financial. It trades about 0.09 of its potential returns per unit of risk. Ellington Financial is currently generating about 0.06 per unit of risk. If you would invest 1,720 in ACRES Commercial Realty on September 26, 2024 and sell it today you would earn a total of 795.00 from holding ACRES Commercial Realty or generate 46.22% return on investment over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Together |
Strength | Significant |
Accuracy | 96.37% |
Values | Daily Returns |
ACRES Commercial Realty vs. Ellington Financial
Performance |
Timeline |
ACRES Commercial Realty |
Ellington Financial |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Modest
ACRES Commercial and Ellington Financial Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with ACRES Commercial and Ellington Financial
The main advantage of trading using opposite ACRES Commercial and Ellington Financial positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if ACRES Commercial position performs unexpectedly, Ellington Financial 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 Ellington Financial will offset losses from the drop in Ellington Financial's long position.ACRES Commercial vs. Annaly Capital Management | ACRES Commercial vs. AGNC Investment Corp | ACRES Commercial vs. AGNC Investment Corp | ACRES Commercial vs. MFA Financial |
Ellington Financial vs. AG Mortgage Investment | Ellington Financial vs. AG Mortgage Investment | Ellington Financial vs. AG Mortgage Investment | Ellington Financial vs. NexPoint Real Estate |
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 Sync Your Broker module to sync your existing holdings, watchlists, positions or portfolios from thousands of online brokerage services, banks, investment account aggregators and robo-advisors..
Other Complementary Tools
Positions Ratings Determine portfolio positions ratings based on digital equity recommendations. Macroaxis instant position ratings are based on combination of fundamental analysis and risk-adjusted market performance | |
Money Flow Index Determine momentum by analyzing Money Flow Index and other technical indicators | |
Aroon Oscillator Analyze current equity momentum using Aroon Oscillator and other momentum ratios | |
Efficient Frontier Plot and analyze your portfolio and positions against risk-return landscape of the market. | |
Pair Correlation Compare performance and examine fundamental relationship between any two equity instruments |