Correlation Between AGNC INVESTMENT and INTER CARS
Can any of the company-specific risk be diversified away by investing in both AGNC INVESTMENT and INTER CARS 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 INTER CARS into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between AGNC INVESTMENT and INTER CARS SA, you can compare the effects of market volatilities on AGNC INVESTMENT and INTER CARS 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 INTER CARS. Check out your portfolio center. Please also check ongoing floating volatility patterns of AGNC INVESTMENT and INTER CARS.
Diversification Opportunities for AGNC INVESTMENT and INTER CARS
0.61 | Correlation Coefficient |
Poor diversification
The 3 months correlation between AGNC and INTER is 0.61. Overlapping area represents the amount of risk that can be diversified away by holding AGNC INVESTMENT and INTER CARS SA in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on INTER CARS SA 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 INTER CARS. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of INTER CARS SA has no effect on the direction of AGNC INVESTMENT i.e., AGNC INVESTMENT and INTER CARS go up and down completely randomly.
Pair Corralation between AGNC INVESTMENT and INTER CARS
Assuming the 90 days trading horizon AGNC INVESTMENT is expected to generate 1.55 times less return on investment than INTER CARS. But when comparing it to its historical volatility, AGNC INVESTMENT is 1.39 times less risky than INTER CARS. It trades about 0.03 of its potential returns per unit of risk. INTER CARS SA is currently generating about 0.03 of returns per unit of risk over similar time horizon. If you would invest 9,228 in INTER CARS SA on October 7, 2024 and sell it today you would earn a total of 2,632 from holding INTER CARS SA or generate 28.52% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
AGNC INVESTMENT vs. INTER CARS SA
Performance |
| Timeline |
| AGNC INVESTMENT |
| INTER CARS SA |
AGNC INVESTMENT and INTER CARS Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with AGNC INVESTMENT and INTER CARS
The main advantage of trading using opposite AGNC INVESTMENT and INTER CARS positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if AGNC INVESTMENT position performs unexpectedly, INTER CARS 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 INTER CARS will offset losses from the drop in INTER CARS's long position.| AGNC INVESTMENT vs. Apple Inc | AGNC INVESTMENT vs. Apple Inc | AGNC INVESTMENT vs. Apple Inc | AGNC INVESTMENT vs. Apple Inc |
| INTER CARS vs. PT Astra International | INTER CARS vs. Superior Plus Corp | INTER CARS vs. NMI Holdings | INTER CARS vs. SIVERS SEMICONDUCTORS AB |
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 Pair Correlation module to compare performance and examine fundamental relationship between any two equity instruments.
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