Correlation Between Ellington Financial and Ellington Financial

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

By analyzing existing cross correlation between Ellington Financial and Ellington Financial, you can compare the effects of market volatilities on Ellington Financial and Ellington Financial 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 Ellington Financial. Check out your portfolio center. Please also check ongoing floating volatility patterns of Ellington Financial and Ellington Financial.

Diversification Opportunities for Ellington Financial and Ellington Financial

0.9

Correlation Coefficient

Ellington Financial  Ellington Financial

Almost no diversification

The 3 months correlation between Ellington and Ellington is 0.9. Overlapping area represents the amount of risk that can be diversified away by holding Ellington Financial and Ellington Financial in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Ellington Financial 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 are associated (or correlated) with Ellington Financial. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Ellington Financial has no effect on the direction of Ellington Financial i.e., Ellington Financial and Ellington Financial go up and down completely randomly.

Pair Corralation between Ellington Financial and Ellington Financial

Assuming the 90 days trading horizon Ellington Financial is expected to generate 1.46 times more return on investment than Ellington Financial. However, Ellington Financial is 1.46 times more volatile than Ellington Financial. It trades about 0.13 of its potential returns per unit of risk. Ellington Financial is currently generating about 0.12 per unit of risk. If you would invest  2,239  in Ellington Financial on May 7, 2025 and sell it today you would earn a total of  94.00  from holding Ellington Financial or generate 4.2% return on investment over 90 days.

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

Ellington Financial  vs.  Ellington Financial

Ellington Financial

Risk-Adjusted Performance

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Ellington Financial are ranked lower than 10 (%) of all global equities and portfolios over the last 90 days. Despite somewhat strong fundamental indicators, Ellington Financial is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

Ellington Financial

Risk-Adjusted Performance

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in Ellington Financial are ranked lower than 9 (%) of all global equities and portfolios over the last 90 days. Despite somewhat strong fundamental indicators, Ellington Financial is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

Pair Trading with Ellington Financial and Ellington Financial

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

The idea behind Ellington Financial and Ellington Financial 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 Earnings Calls module to check upcoming earnings announcements updated hourly across public exchanges.