Correlation Between Ellington Residential and CaliberCos
Can any of the company-specific risk be diversified away by investing in both Ellington Residential and CaliberCos 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 Residential and CaliberCos into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Ellington Residential Mortgage and CaliberCos Class A, you can compare the effects of market volatilities on Ellington Residential and CaliberCos 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 Residential with a short position of CaliberCos. Check out your portfolio center. Please also check ongoing floating volatility patterns of Ellington Residential and CaliberCos.
Diversification Opportunities for Ellington Residential and CaliberCos
-0.41 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Ellington and CaliberCos is -0.41. Overlapping area represents the amount of risk that can be diversified away by holding Ellington Residential Mortgage and CaliberCos Class A in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on CaliberCos Class A and Ellington Residential 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 Residential Mortgage are associated (or correlated) with CaliberCos. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of CaliberCos Class A has no effect on the direction of Ellington Residential i.e., Ellington Residential and CaliberCos go up and down completely randomly.
Pair Corralation between Ellington Residential and CaliberCos
Given the investment horizon of 90 days Ellington Residential is expected to generate 12.94 times less return on investment than CaliberCos. But when comparing it to its historical volatility, Ellington Residential Mortgage is 20.47 times less risky than CaliberCos. It trades about 0.1 of its potential returns per unit of risk. CaliberCos Class A is currently generating about 0.06 of returns per unit of risk over similar time horizon. If you would invest 353.00 in CaliberCos Class A on June 2, 2025 and sell it today you would lose (6.00) from holding CaliberCos Class A or give up 1.7% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Ellington Residential Mortgage vs. CaliberCos Class A
Performance |
| Timeline |
| Ellington Residential |
| CaliberCos Class A |
Ellington Residential and CaliberCos Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Ellington Residential and CaliberCos
The main advantage of trading using opposite Ellington Residential and CaliberCos positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Ellington Residential position performs unexpectedly, CaliberCos 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 CaliberCos will offset losses from the drop in CaliberCos' long position.| Ellington Residential vs. Ellington Financial | Ellington Residential vs. Dynex Capital | Ellington Residential vs. Ares Commercial Real | Ellington Residential vs. Cherry Hill Mortgage |
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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 Cryptocurrency Center module to build and monitor diversified portfolio of extremely risky digital assets and cryptocurrency.
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