Correlation Between AGNC INVESTMENT and MOUNT GIBSON
Can any of the company-specific risk be diversified away by investing in both AGNC INVESTMENT and MOUNT GIBSON 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 MOUNT GIBSON into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between AGNC INVESTMENT and MOUNT GIBSON IRON, you can compare the effects of market volatilities on AGNC INVESTMENT and MOUNT GIBSON 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 MOUNT GIBSON. Check out your portfolio center. Please also check ongoing floating volatility patterns of AGNC INVESTMENT and MOUNT GIBSON.
Diversification Opportunities for AGNC INVESTMENT and MOUNT GIBSON
0.12 | Correlation Coefficient |
Average diversification
The 3 months correlation between AGNC and MOUNT is 0.12. Overlapping area represents the amount of risk that can be diversified away by holding AGNC INVESTMENT and MOUNT GIBSON IRON in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on MOUNT GIBSON IRON 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 MOUNT GIBSON. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of MOUNT GIBSON IRON has no effect on the direction of AGNC INVESTMENT i.e., AGNC INVESTMENT and MOUNT GIBSON go up and down completely randomly.
Pair Corralation between AGNC INVESTMENT and MOUNT GIBSON
Assuming the 90 days trading horizon AGNC INVESTMENT is expected to generate 1.28 times less return on investment than MOUNT GIBSON. But when comparing it to its historical volatility, AGNC INVESTMENT is 1.83 times less risky than MOUNT GIBSON. It trades about 0.22 of its potential returns per unit of risk. MOUNT GIBSON IRON is currently generating about 0.15 of returns per unit of risk over similar time horizon. If you would invest 17.00 in MOUNT GIBSON IRON on October 25, 2024 and sell it today you would earn a total of 1.00 from holding MOUNT GIBSON IRON or generate 5.88% 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. MOUNT GIBSON IRON
Performance |
| Timeline |
| AGNC INVESTMENT |
| MOUNT GIBSON IRON |
AGNC INVESTMENT and MOUNT GIBSON Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with AGNC INVESTMENT and MOUNT GIBSON
The main advantage of trading using opposite AGNC INVESTMENT and MOUNT GIBSON positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if AGNC INVESTMENT position performs unexpectedly, MOUNT GIBSON 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 MOUNT GIBSON will offset losses from the drop in MOUNT GIBSON's long position.| AGNC INVESTMENT vs. Apple Inc | AGNC INVESTMENT vs. Apple Inc | AGNC INVESTMENT vs. Apple Inc | AGNC INVESTMENT vs. Apple Inc |
| MOUNT GIBSON vs. Xenia Hotels Resorts | MOUNT GIBSON vs. UNITED UTILITIES GR | MOUNT GIBSON vs. American Public Education | MOUNT GIBSON vs. Laureate Education |
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 USA ETFs module to find actively traded Exchange Traded Funds (ETF) in USA.
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