Correlation Between Granite Point and ELLINGTON RESIDMTG

Can any of the company-specific risk be diversified away by investing in both Granite Point and ELLINGTON RESIDMTG 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 Granite Point and ELLINGTON RESIDMTG into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between Granite Point Mortgage and ELLINGTON RESIDMTG SBI, you can compare the effects of market volatilities on Granite Point and ELLINGTON RESIDMTG 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 Granite Point with a short position of ELLINGTON RESIDMTG. Check out your portfolio center. Please also check ongoing floating volatility patterns of Granite Point and ELLINGTON RESIDMTG.

Diversification Opportunities for Granite Point and ELLINGTON RESIDMTG

0.0

Correlation Coefficient

Granite Point  ELLINGTON RESIDMTG

Pay attention - limited upside

The 3 months correlation between Granite and ELLINGTON is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding Granite Point Mortgage and ELLINGTON RESIDMTG SBI in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on ELLINGTON RESIDMTG SBI and Granite Point 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 Granite Point Mortgage are associated (or correlated) with ELLINGTON RESIDMTG. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of ELLINGTON RESIDMTG SBI has no effect on the direction of Granite Point i.e., Granite Point and ELLINGTON RESIDMTG go up and down completely randomly.

Pair Corralation between Granite Point and ELLINGTON RESIDMTG

If you would invest  0.00  in Granite Point Mortgage on December 22, 2024 and sell it today you would earn a total of  0.00  from holding Granite Point Mortgage or generate 0.0% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Flat
Strength	Insignificant
Accuracy	1.67%
Values	Daily Returns

Granite Point Mortgage  vs.  ELLINGTON RESIDMTG SBI

Granite Point Mortgage

Risk-Adjusted Performance

Very Weak

Over the last 90 days Granite Point Mortgage has generated negative risk-adjusted returns adding no value to investors with long positions. Despite nearly stable basic indicators, Granite Point is not utilizing all of its potentials. The current stock price disturbance, may contribute to mid-run losses for the stockholders.

ELLINGTON RESIDMTG SBI

Risk-Adjusted Performance

Very Weak

Over the last 90 days ELLINGTON RESIDMTG SBI has generated negative risk-adjusted returns adding no value to investors with long positions. Despite fragile performance in the last few months, the Stock's basic indicators remain nearly stable which may send shares a bit higher in April 2025. The current disturbance may also be a sign of long-run up-swing for the company stockholders.

Pair Trading with Granite Point and ELLINGTON RESIDMTG

The main advantage of trading using opposite Granite Point and ELLINGTON RESIDMTG positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Granite Point position performs unexpectedly, ELLINGTON RESIDMTG 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 RESIDMTG will offset losses from the drop in ELLINGTON RESIDMTG's long position.

The idea behind Granite Point Mortgage and ELLINGTON RESIDMTG SBI pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.

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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 Efficient Frontier module to plot and analyze your portfolio and positions against risk-return landscape of the market..