Correlation Between Sachem Capital and Rithm Property

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

By analyzing existing cross correlation between Sachem Capital Corp and Rithm Property Trust, you can compare the effects of market volatilities on Sachem Capital and Rithm Property 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 Sachem Capital with a short position of Rithm Property. Check out your portfolio center. Please also check ongoing floating volatility patterns of Sachem Capital and Rithm Property.

Diversification Opportunities for Sachem Capital and Rithm Property

0.52

Correlation Coefficient

Sachem Capital  Rithm Property

Very weak diversification

The 3 months correlation between Sachem and Rithm is 0.52. Overlapping area represents the amount of risk that can be diversified away by holding Sachem Capital Corp and Rithm Property Trust in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Rithm Property Trust and Sachem Capital 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 Sachem Capital Corp are associated (or correlated) with Rithm Property. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Rithm Property Trust has no effect on the direction of Sachem Capital i.e., Sachem Capital and Rithm Property go up and down completely randomly.

Pair Corralation between Sachem Capital and Rithm Property

Assuming the 90 days trading horizon Sachem Capital Corp is expected to generate 0.56 times more return on investment than Rithm Property. However, Sachem Capital Corp is 1.78 times less risky than Rithm Property. It trades about 0.01 of its potential returns per unit of risk. Rithm Property Trust is currently generating about -0.04 per unit of risk. If you would invest  1,705  in Sachem Capital Corp on September 26, 2024 and sell it today you would earn a total of  39.00  from holding Sachem Capital Corp or generate 2.29% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Weak
Accuracy	100.0%
Values	Daily Returns

Sachem Capital Corp  vs.  Rithm Property Trust

Sachem Capital Corp

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Sachem Capital Corp has generated negative risk-adjusted returns adding no value to investors with long positions. Despite unsteady performance in the last few months, the Preferred Stock's basic indicators remain somewhat strong which may send shares a bit higher in January 2025. The current disturbance may also be a sign of long term up-swing for the company investors.

Rithm Property Trust

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Rithm Property Trust has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of latest unsteady performance, the Stock's basic indicators remain stable and the newest uproar on Wall Street may also be a sign of mid-term gains for the firm private investors.

Pair Trading with Sachem Capital and Rithm Property

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

The idea behind Sachem Capital Corp and Rithm Property Trust 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 Pair Correlation module to compare performance and examine fundamental relationship between any two equity instruments.