Correlation Between AGNC INVESTMENT and Microsoft
Can any of the company-specific risk be diversified away by investing in both AGNC INVESTMENT and Microsoft 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 Microsoft into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between AGNC INVESTMENT and Microsoft, you can compare the effects of market volatilities on AGNC INVESTMENT and Microsoft 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 Microsoft. Check out your portfolio center. Please also check ongoing floating volatility patterns of AGNC INVESTMENT and Microsoft.
Diversification Opportunities for AGNC INVESTMENT and Microsoft
0.44 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between AGNC and Microsoft is 0.44. Overlapping area represents the amount of risk that can be diversified away by holding AGNC INVESTMENT and Microsoft in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Microsoft 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 Microsoft. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Microsoft has no effect on the direction of AGNC INVESTMENT i.e., AGNC INVESTMENT and Microsoft go up and down completely randomly.
Pair Corralation between AGNC INVESTMENT and Microsoft
Assuming the 90 days trading horizon AGNC INVESTMENT is expected to generate 0.63 times more return on investment than Microsoft. However, AGNC INVESTMENT is 1.59 times less risky than Microsoft. It trades about 0.22 of its potential returns per unit of risk. Microsoft is currently generating about -0.04 per unit of risk. If you would invest 900.00 in AGNC INVESTMENT on November 4, 2024 and sell it today you would earn a total of 56.00 from holding AGNC INVESTMENT or generate 6.22% 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. Microsoft
Performance |
| Timeline |
| AGNC INVESTMENT |
| Microsoft |
AGNC INVESTMENT and Microsoft Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with AGNC INVESTMENT and Microsoft
The main advantage of trading using opposite AGNC INVESTMENT and Microsoft positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if AGNC INVESTMENT position performs unexpectedly, Microsoft 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 Microsoft will offset losses from the drop in Microsoft'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 |
| Microsoft vs. Magnachip Semiconductor | Microsoft vs. Elmos Semiconductor SE | Microsoft vs. ZhongAn Online P | Microsoft vs. EIDESVIK OFFSHORE NK |
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 Fundamental Analysis module to view fundamental data based on most recent published financial statements.
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