Correlation Between MORE and VanEck Mortgage

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

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

Diversification Opportunities for MORE and VanEck Mortgage

-0.5

Correlation Coefficient

MORE  VanEck Mortgage

Very good diversification

The 3 months correlation between MORE and VanEck is -0.5. Overlapping area represents the amount of risk that can be diversified away by holding MORE and VanEck Mortgage REIT in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on VanEck Mortgage REIT and MORE 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 MORE are associated (or correlated) with VanEck Mortgage. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of VanEck Mortgage REIT has no effect on the direction of MORE i.e., MORE and VanEck Mortgage go up and down completely randomly.

Pair Corralation between MORE and VanEck Mortgage

If you would invest  2,337  in MORE on September 14, 2024 and sell it today you would earn a total of  0.00  from holding MORE or generate 0.0% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Very Weak
Accuracy	1.59%
Values	Daily Returns

MORE  vs.  VanEck Mortgage REIT

MORE

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days MORE has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of rather sound basic indicators, MORE is not utilizing all of its potentials. The latest stock price tumult, may contribute to shorter-term losses for the shareholders.

VanEck Mortgage REIT

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days VanEck Mortgage REIT has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of comparatively stable basic indicators, VanEck Mortgage is not utilizing all of its potentials. The recent stock price uproar, may contribute to short-horizon losses for the private investors.

Pair Trading with MORE and VanEck Mortgage

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

The idea behind MORE and VanEck Mortgage REIT 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 Share Portfolio module to track or share privately all of your investments from the convenience of any device.