Correlation Between AGNC INVESTMENT and Arrow Electronics
Can any of the company-specific risk be diversified away by investing in both AGNC INVESTMENT and Arrow Electronics 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 Arrow Electronics into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between AGNC INVESTMENT and Arrow Electronics, you can compare the effects of market volatilities on AGNC INVESTMENT and Arrow Electronics 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 Arrow Electronics. Check out your portfolio center. Please also check ongoing floating volatility patterns of AGNC INVESTMENT and Arrow Electronics.
Diversification Opportunities for AGNC INVESTMENT and Arrow Electronics
0.07 | Correlation Coefficient |
Significant diversification
The 3 months correlation between AGNC and Arrow is 0.07. Overlapping area represents the amount of risk that can be diversified away by holding AGNC INVESTMENT and Arrow Electronics in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Arrow Electronics 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 Arrow Electronics. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Arrow Electronics has no effect on the direction of AGNC INVESTMENT i.e., AGNC INVESTMENT and Arrow Electronics go up and down completely randomly.
Pair Corralation between AGNC INVESTMENT and Arrow Electronics
Assuming the 90 days trading horizon AGNC INVESTMENT is expected to generate 1.2 times more return on investment than Arrow Electronics. However, AGNC INVESTMENT is 1.2 times more volatile than Arrow Electronics. It trades about 0.16 of its potential returns per unit of risk. Arrow Electronics is currently generating about 0.16 per unit of risk. If you would invest 889.00 in AGNC INVESTMENT on October 22, 2024 and sell it today you would earn a total of 31.00 from holding AGNC INVESTMENT or generate 3.49% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 94.12% |
| Values | Daily Returns |
AGNC INVESTMENT vs. Arrow Electronics
Performance |
| Timeline |
| AGNC INVESTMENT |
| Arrow Electronics |
AGNC INVESTMENT and Arrow Electronics Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with AGNC INVESTMENT and Arrow Electronics
The main advantage of trading using opposite AGNC INVESTMENT and Arrow Electronics positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if AGNC INVESTMENT position performs unexpectedly, Arrow Electronics 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 Arrow Electronics will offset losses from the drop in Arrow Electronics' long position.| AGNC INVESTMENT vs. Apple Inc | AGNC INVESTMENT vs. Apple Inc | AGNC INVESTMENT vs. Apple Inc | AGNC INVESTMENT vs. Apple Inc |
| Arrow Electronics vs. AGNC INVESTMENT | Arrow Electronics vs. BANK OF CHINA | Arrow Electronics vs. EAT WELL INVESTMENT | Arrow Electronics vs. Chuangs China Investments |
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 Money Managers module to screen money managers from public funds and ETFs managed around the world.
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