Correlation Between AGNC INVESTMENT and KLA
Can any of the company-specific risk be diversified away by investing in both AGNC INVESTMENT and KLA 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 KLA into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between AGNC INVESTMENT and KLA Corporation, you can compare the effects of market volatilities on AGNC INVESTMENT and KLA 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 KLA. Check out your portfolio center. Please also check ongoing floating volatility patterns of AGNC INVESTMENT and KLA.
Diversification Opportunities for AGNC INVESTMENT and KLA
0.58 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between AGNC and KLA is 0.58. Overlapping area represents the amount of risk that can be diversified away by holding AGNC INVESTMENT and KLA Corp. in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on KLA Corporation 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 KLA. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of KLA Corporation has no effect on the direction of AGNC INVESTMENT i.e., AGNC INVESTMENT and KLA go up and down completely randomly.
Pair Corralation between AGNC INVESTMENT and KLA
Assuming the 90 days trading horizon AGNC INVESTMENT is expected to generate 3.04 times less return on investment than KLA. But when comparing it to its historical volatility, AGNC INVESTMENT is 2.18 times less risky than KLA. It trades about 0.22 of its potential returns per unit of risk. KLA Corporation is currently generating about 0.3 of returns per unit of risk over similar time horizon. If you would invest 61,790 in KLA Corporation on November 4, 2024 and sell it today you would earn a total of 12,190 from holding KLA Corporation or generate 19.73% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
AGNC INVESTMENT vs. KLA Corp.
Performance |
| Timeline |
| AGNC INVESTMENT |
| KLA Corporation |
AGNC INVESTMENT and KLA Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with AGNC INVESTMENT and KLA
The main advantage of trading using opposite AGNC INVESTMENT and KLA positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if AGNC INVESTMENT position performs unexpectedly, KLA 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 KLA will offset losses from the drop in KLA's long position.| AGNC INVESTMENT vs. CN MODERN DAIRY | AGNC INVESTMENT vs. LIFEWAY FOODS | AGNC INVESTMENT vs. United Natural Foods | AGNC INVESTMENT vs. Align Technology |
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 Instant Ratings module to determine any equity ratings based on digital recommendations. Macroaxis instant equity ratings are based on combination of fundamental analysis and risk-adjusted market performance.
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