Correlation Between AGNC INVESTMENT and Cars
Can any of the company-specific risk be diversified away by investing in both AGNC INVESTMENT and 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 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 Cars Inc, you can compare the effects of market volatilities on AGNC INVESTMENT and 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 Cars. Check out your portfolio center. Please also check ongoing floating volatility patterns of AGNC INVESTMENT and Cars.
Diversification Opportunities for AGNC INVESTMENT and Cars
0.15 | Correlation Coefficient |
Average diversification
The 3 months correlation between AGNC and Cars is 0.15. Overlapping area represents the amount of risk that can be diversified away by holding AGNC INVESTMENT and Cars Inc in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Cars Inc 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 Cars. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Cars Inc has no effect on the direction of AGNC INVESTMENT i.e., AGNC INVESTMENT and Cars go up and down completely randomly.
Pair Corralation between AGNC INVESTMENT and Cars
Assuming the 90 days trading horizon AGNC INVESTMENT is expected to generate 1.51 times less return on investment than Cars. But when comparing it to its historical volatility, AGNC INVESTMENT is 1.77 times less risky than Cars. It trades about 0.03 of its potential returns per unit of risk. Cars Inc is currently generating about 0.03 of returns per unit of risk over similar time horizon. If you would invest 1,380 in Cars Inc on October 7, 2024 and sell it today you would earn a total of 250.00 from holding Cars Inc or generate 18.12% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
AGNC INVESTMENT vs. Cars Inc
Performance |
| Timeline |
| AGNC INVESTMENT |
| Cars Inc |
AGNC INVESTMENT and Cars Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with AGNC INVESTMENT and Cars
The main advantage of trading using opposite AGNC INVESTMENT and Cars positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if AGNC INVESTMENT position performs unexpectedly, 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 Cars will offset losses from the drop in Cars' long position.| AGNC INVESTMENT vs. Apple Inc | AGNC INVESTMENT vs. Apple Inc | AGNC INVESTMENT vs. Apple Inc | AGNC INVESTMENT vs. Apple Inc |
| Cars vs. Penske Automotive Group | Cars vs. Superior Plus Corp | Cars vs. NMI Holdings | 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 Price Transformation module to use Price Transformation models to analyze the depth of different equity instruments across global markets.
Other Complementary Tools
| Idea Breakdown Analyze constituents of all Macroaxis ideas. Macroaxis investment ideas are predefined, sector-focused investing themes | |
| Share Portfolio Track or share privately all of your investments from the convenience of any device | |
| Portfolio Optimization Compute new portfolio that will generate highest expected return given your specified tolerance for risk | |
| CEOs Directory Screen CEOs from public companies around the world | |
| Commodity Channel Use Commodity Channel Index to analyze current equity momentum |