Correlation Between AGNC INVESTMENT and Apollo Investment
Can any of the company-specific risk be diversified away by investing in both AGNC INVESTMENT and Apollo 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 AGNC INVESTMENT and Apollo Investment into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between AGNC INVESTMENT and Apollo Investment Corp, you can compare the effects of market volatilities on AGNC INVESTMENT and Apollo 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 AGNC INVESTMENT with a short position of Apollo Investment. Check out your portfolio center. Please also check ongoing floating volatility patterns of AGNC INVESTMENT and Apollo Investment.
Diversification Opportunities for AGNC INVESTMENT and Apollo Investment
0.29 | Correlation Coefficient |
Modest diversification
The 3 months correlation between AGNC and Apollo is 0.29. Overlapping area represents the amount of risk that can be diversified away by holding AGNC INVESTMENT and Apollo Investment Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Apollo Investment Corp and AGNC INVESTMENT 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 AGNC INVESTMENT are associated (or correlated) with Apollo Investment. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Apollo Investment Corp has no effect on the direction of AGNC INVESTMENT i.e., AGNC INVESTMENT and Apollo Investment go up and down completely randomly.
Pair Corralation between AGNC INVESTMENT and Apollo Investment
Assuming the 90 days trading horizon AGNC INVESTMENT is expected to generate 0.93 times more return on investment than Apollo Investment. However, AGNC INVESTMENT is 1.07 times less risky than Apollo Investment. It trades about 0.03 of its potential returns per unit of risk. Apollo Investment Corp is currently generating about -0.1 per unit of risk. If you would invest 900.00 in AGNC INVESTMENT on October 12, 2024 and sell it today you would earn a total of 5.00 from holding AGNC INVESTMENT or generate 0.56% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 94.44% |
| Values | Daily Returns |
AGNC INVESTMENT vs. Apollo Investment Corp
Performance |
| Timeline |
| AGNC INVESTMENT |
| Apollo Investment Corp |
AGNC INVESTMENT and Apollo Investment Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with AGNC INVESTMENT and Apollo Investment
The main advantage of trading using opposite AGNC INVESTMENT and Apollo Investment positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if AGNC INVESTMENT position performs unexpectedly, Apollo 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 Apollo Investment will offset losses from the drop in Apollo Investment's long position.| AGNC INVESTMENT vs. Apple Inc | AGNC INVESTMENT vs. Apple Inc | AGNC INVESTMENT vs. Apple Inc | AGNC INVESTMENT vs. Apple Inc |
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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 Options Analysis module to analyze and evaluate options and option chains as a potential hedge for your portfolios.
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