Correlation Between AGNC INVESTMENT and Coffee Holding
Can any of the company-specific risk be diversified away by investing in both AGNC INVESTMENT and Coffee Holding 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 Coffee Holding into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between AGNC INVESTMENT and Coffee Holding Co, you can compare the effects of market volatilities on AGNC INVESTMENT and Coffee Holding 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 Coffee Holding. Check out your portfolio center. Please also check ongoing floating volatility patterns of AGNC INVESTMENT and Coffee Holding.
Diversification Opportunities for AGNC INVESTMENT and Coffee Holding
0.63 | Correlation Coefficient |
Poor diversification
The 3 months correlation between AGNC and Coffee is 0.63. Overlapping area represents the amount of risk that can be diversified away by holding AGNC INVESTMENT and Coffee Holding Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Coffee Holding 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 Coffee Holding. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Coffee Holding has no effect on the direction of AGNC INVESTMENT i.e., AGNC INVESTMENT and Coffee Holding go up and down completely randomly.
Pair Corralation between AGNC INVESTMENT and Coffee Holding
Assuming the 90 days trading horizon AGNC INVESTMENT is expected to generate 0.35 times more return on investment than Coffee Holding. However, AGNC INVESTMENT is 2.83 times less risky than Coffee Holding. It trades about 0.2 of its potential returns per unit of risk. Coffee Holding Co is currently generating about 0.02 per unit of risk. If you would invest 907.00 in AGNC INVESTMENT on November 6, 2024 and sell it today you would earn a total of 49.00 from holding AGNC INVESTMENT or generate 5.4% 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. Coffee Holding Co
Performance |
| Timeline |
| AGNC INVESTMENT |
| Coffee Holding |
AGNC INVESTMENT and Coffee Holding Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with AGNC INVESTMENT and Coffee Holding
The main advantage of trading using opposite AGNC INVESTMENT and Coffee Holding positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if AGNC INVESTMENT position performs unexpectedly, Coffee Holding 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 Coffee Holding will offset losses from the drop in Coffee Holding's long position.| AGNC INVESTMENT vs. Elmos Semiconductor SE | AGNC INVESTMENT vs. PT Steel Pipe | AGNC INVESTMENT vs. Lattice Semiconductor | AGNC INVESTMENT vs. Daido Steel Co |
| Coffee Holding vs. Nestl SA | Coffee Holding vs. Kraft Heinz Co | Coffee Holding vs. General Mills | Coffee Holding vs. General Mills |
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 Equity Analysis module to research over 250,000 global equities including funds, stocks and ETFs to find investment opportunities.
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