Correlation Between Capstead Mortgage and American Homes
Can any of the company-specific risk be diversified away by investing in both Capstead Mortgage and American Homes 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 Capstead Mortgage and American Homes into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Capstead Mortgage and American Homes 4, you can compare the effects of market volatilities on Capstead Mortgage and American Homes 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 Capstead Mortgage with a short position of American Homes. Check out your portfolio center. Please also check ongoing floating volatility patterns of Capstead Mortgage and American Homes.
Diversification Opportunities for Capstead Mortgage and American Homes
0.0 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between Capstead and American is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding Capstead Mortgage and American Homes 4 in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on American Homes 4 and Capstead Mortgage 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 Capstead Mortgage are associated (or correlated) with American Homes. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of American Homes 4 has no effect on the direction of Capstead Mortgage i.e., Capstead Mortgage and American Homes go up and down completely randomly.
Pair Corralation between Capstead Mortgage and American Homes
If you would invest (100.00) in Capstead Mortgage on January 20, 2024 and sell it today you would earn a total of 100.00 from holding Capstead Mortgage or generate -100.0% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Flat |
| Strength | Insignificant |
| Accuracy | 0.0% |
| Values | Daily Returns |
Capstead Mortgage vs. American Homes 4
Performance |
| Timeline |
| Capstead Mortgage |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
| American Homes 4 |
Capstead Mortgage and American Homes Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Capstead Mortgage and American Homes
The main advantage of trading using opposite Capstead Mortgage and American Homes positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Capstead Mortgage position performs unexpectedly, American Homes 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 American Homes will offset losses from the drop in American Homes' long position.| Capstead Mortgage vs. Marfrig Global Foods | Capstead Mortgage vs. Hurco Companies | Capstead Mortgage vs. Jeld Wen Holding | Capstead Mortgage vs. Jacobs Solutions |
| American Homes vs. Sun Communities | American Homes vs. Clipper Realty | American Homes vs. UDR Inc | American Homes vs. UMH Properties |
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 Commodity Channel module to use Commodity Channel Index to analyze current equity momentum.
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