Correlation Between New Residential and AGNC INVESTMENT
Can any of the company-specific risk be diversified away by investing in both New Residential and AGNC INVESTMENT 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 New Residential and AGNC INVESTMENT into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between New Residential Investment and AGNC INVESTMENT, you can compare the effects of market volatilities on New Residential and AGNC INVESTMENT 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 New Residential with a short position of AGNC INVESTMENT. Check out your portfolio center. Please also check ongoing floating volatility patterns of New Residential and AGNC INVESTMENT.
Diversification Opportunities for New Residential and AGNC INVESTMENT
0.52 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between New and AGNC is 0.52. Overlapping area represents the amount of risk that can be diversified away by holding New Residential Investment and AGNC INVESTMENT in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on AGNC INVESTMENT and New 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 New Residential Investment are associated (or correlated) with AGNC INVESTMENT. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of AGNC INVESTMENT has no effect on the direction of New Residential i.e., New Residential and AGNC INVESTMENT go up and down completely randomly.
Pair Corralation between New Residential and AGNC INVESTMENT
Assuming the 90 days trading horizon New Residential Investment is expected to generate 1.02 times more return on investment than AGNC INVESTMENT. However, New Residential is 1.02 times more volatile than AGNC INVESTMENT. It trades about 0.35 of its potential returns per unit of risk. AGNC INVESTMENT is currently generating about 0.22 per unit of risk. If you would invest 1,005 in New Residential Investment on October 20, 2024 and sell it today you would earn a total of 86.00 from holding New Residential Investment or generate 8.56% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
New Residential Investment vs. AGNC INVESTMENT
Performance |
| Timeline |
| New Residential Inve |
| AGNC INVESTMENT |
New Residential and AGNC INVESTMENT Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with New Residential and AGNC INVESTMENT
The main advantage of trading using opposite New Residential and AGNC INVESTMENT positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if New Residential position performs unexpectedly, AGNC INVESTMENT 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 AGNC INVESTMENT will offset losses from the drop in AGNC INVESTMENT's long position.| New Residential vs. ANTA SPORTS PRODUCT | New Residential vs. X FAB Silicon Foundries | New Residential vs. TRI CHEMICAL LABORATINC | New Residential vs. GREENX METALS LTD |
| AGNC INVESTMENT vs. CompuGroup Medical SE | AGNC INVESTMENT vs. IMAGIN MEDICAL INC | AGNC INVESTMENT vs. Thai Beverage Public | AGNC INVESTMENT vs. SENECA FOODS A |
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 Stocks Directory module to find actively traded stocks across global markets.
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