Correlation Between Ellington Financial and C3 Ai
Can any of the company-specific risk be diversified away by investing in both Ellington Financial and C3 Ai 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 Ellington Financial and C3 Ai into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Ellington Financial LLC and C3 Ai Inc, you can compare the effects of market volatilities on Ellington Financial and C3 Ai 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 Ellington Financial with a short position of C3 Ai. Check out your portfolio center. Please also check ongoing floating volatility patterns of Ellington Financial and C3 Ai.
Diversification Opportunities for Ellington Financial and C3 Ai
-0.22 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Ellington and C3 Ai is -0.22. Overlapping area represents the amount of risk that can be diversified away by holding Ellington Financial LLC and C3 Ai Inc in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on C3 Ai Inc and Ellington Financial 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 Ellington Financial LLC are associated (or correlated) with C3 Ai. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of C3 Ai Inc has no effect on the direction of Ellington Financial i.e., Ellington Financial and C3 Ai go up and down completely randomly.
Pair Corralation between Ellington Financial and C3 Ai
Considering the 90-day investment horizon Ellington Financial LLC is expected to generate 0.58 times more return on investment than C3 Ai. However, Ellington Financial LLC is 1.74 times less risky than C3 Ai. It trades about -0.02 of its potential returns per unit of risk. C3 Ai Inc is currently generating about -0.35 per unit of risk. If you would invest 1,167 in Ellington Financial LLC on January 25, 2024 and sell it today you would lose (12.00) from holding Ellington Financial LLC or give up 1.03% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Ellington Financial LLC vs. C3 Ai Inc
Performance |
| Timeline |
| Ellington Financial LLC |
| C3 Ai Inc |
Ellington Financial and C3 Ai Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Ellington Financial and C3 Ai
The main advantage of trading using opposite Ellington Financial and C3 Ai positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Ellington Financial position performs unexpectedly, C3 Ai 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 C3 Ai will offset losses from the drop in C3 Ai's long position.| Ellington Financial vs. Ellington Residential Mortgage | Ellington Financial vs. Orchid Island Capital | Ellington Financial vs. ARMOUR Residential REIT | Ellington Financial vs. Dynex Capital |
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 Sign In To Macroaxis module to sign in to explore Macroaxis' wealth optimization platform and fintech modules.
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