Correlation Between Granite Point and ACRES Commercial
Can any of the company-specific risk be diversified away by investing in both Granite Point and ACRES Commercial 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 ACRES Commercial 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 ACRES Commercial Realty, you can compare the effects of market volatilities on Granite Point and ACRES Commercial 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 ACRES Commercial. Check out your portfolio center. Please also check ongoing floating volatility patterns of Granite Point and ACRES Commercial.
Diversification Opportunities for Granite Point and ACRES Commercial
-0.07 | Correlation Coefficient |
Good diversification
The 3 months correlation between Granite and ACRES is -0.07. Overlapping area represents the amount of risk that can be diversified away by holding Granite Point Mortgage and ACRES Commercial Realty in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on ACRES Commercial Realty 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 ACRES Commercial. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of ACRES Commercial Realty has no effect on the direction of Granite Point i.e., Granite Point and ACRES Commercial go up and down completely randomly.
Pair Corralation between Granite Point and ACRES Commercial
Assuming the 90 days trading horizon Granite Point Mortgage is expected to under-perform the ACRES Commercial. In addition to that, Granite Point is 2.52 times more volatile than ACRES Commercial Realty. It trades about -0.01 of its total potential returns per unit of risk. ACRES Commercial Realty is currently generating about 0.33 per unit of volatility. If you would invest 2,432 in ACRES Commercial Realty on December 30, 2024 and sell it today you would earn a total of 120.00 from holding ACRES Commercial Realty or generate 4.93% return on investment over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Against |
Strength | Insignificant |
Accuracy | 100.0% |
Values | Daily Returns |
Granite Point Mortgage vs. ACRES Commercial Realty
Performance |
Timeline |
Granite Point Mortgage |
ACRES Commercial Realty |
Granite Point and ACRES Commercial Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with Granite Point and ACRES Commercial
The main advantage of trading using opposite Granite Point and ACRES Commercial positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Granite Point position performs unexpectedly, ACRES Commercial 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 ACRES Commercial will offset losses from the drop in ACRES Commercial's long position.Granite Point vs. PennyMac Mortgage Investment | Granite Point vs. Rithm Capital Corp | Granite Point vs. ARMOUR Residential REIT | Granite Point vs. MFA Financial |
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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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