Correlation Between ADRIATIC METALS and AGNC INVESTMENT
Can any of the company-specific risk be diversified away by investing in both ADRIATIC METALS 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 ADRIATIC METALS and AGNC INVESTMENT into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between ADRIATIC METALS LS 013355 and AGNC INVESTMENT, you can compare the effects of market volatilities on ADRIATIC METALS 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 ADRIATIC METALS with a short position of AGNC INVESTMENT. Check out your portfolio center. Please also check ongoing floating volatility patterns of ADRIATIC METALS and AGNC INVESTMENT.
Diversification Opportunities for ADRIATIC METALS and AGNC INVESTMENT
0.6 | Correlation Coefficient |
Poor diversification
The 3 months correlation between ADRIATIC and AGNC is 0.6. Overlapping area represents the amount of risk that can be diversified away by holding ADRIATIC METALS LS 013355 and AGNC INVESTMENT in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on AGNC INVESTMENT and ADRIATIC METALS 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 ADRIATIC METALS LS 013355 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 ADRIATIC METALS i.e., ADRIATIC METALS and AGNC INVESTMENT go up and down completely randomly.
Pair Corralation between ADRIATIC METALS and AGNC INVESTMENT
Assuming the 90 days trading horizon ADRIATIC METALS LS 013355 is expected to generate 2.29 times more return on investment than AGNC INVESTMENT. However, ADRIATIC METALS is 2.29 times more volatile than AGNC INVESTMENT. It trades about 0.02 of its potential returns per unit of risk. AGNC INVESTMENT is currently generating about 0.05 per unit of risk. If you would invest 226.00 in ADRIATIC METALS LS 013355 on December 13, 2024 and sell it today you would earn a total of 26.00 from holding ADRIATIC METALS LS 013355 or generate 11.5% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
ADRIATIC METALS LS 013355 vs. AGNC INVESTMENT
Performance |
| Timeline |
| ADRIATIC METALS LS |
| AGNC INVESTMENT |
ADRIATIC METALS and AGNC INVESTMENT Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with ADRIATIC METALS and AGNC INVESTMENT
The main advantage of trading using opposite ADRIATIC METALS and AGNC INVESTMENT positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if ADRIATIC METALS 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.| ADRIATIC METALS vs. ORMAT TECHNOLOGIES | ||
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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 Idea Breakdown module to analyze constituents of all Macroaxis ideas. Macroaxis investment ideas are predefined, sector-focused investing themes.
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