Correlation Between AGNC INVESTMENT and Booking Holdings
Can any of the company-specific risk be diversified away by investing in both AGNC INVESTMENT and Booking Holdings 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 Booking Holdings into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between AGNC INVESTMENT and Booking Holdings, you can compare the effects of market volatilities on AGNC INVESTMENT and Booking Holdings 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 Booking Holdings. Check out your portfolio center. Please also check ongoing floating volatility patterns of AGNC INVESTMENT and Booking Holdings.
Diversification Opportunities for AGNC INVESTMENT and Booking Holdings
0.33 | Correlation Coefficient |
Weak diversification
The 3 months correlation between AGNC and Booking is 0.33. Overlapping area represents the amount of risk that can be diversified away by holding AGNC INVESTMENT and Booking Holdings in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Booking Holdings 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 Booking Holdings. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Booking Holdings has no effect on the direction of AGNC INVESTMENT i.e., AGNC INVESTMENT and Booking Holdings go up and down completely randomly.
Pair Corralation between AGNC INVESTMENT and Booking Holdings
Assuming the 90 days trading horizon AGNC INVESTMENT is expected to generate 0.7 times more return on investment than Booking Holdings. However, AGNC INVESTMENT is 1.43 times less risky than Booking Holdings. It trades about 0.23 of its potential returns per unit of risk. Booking Holdings is currently generating about -0.1 per unit of risk. If you would invest 907.00 in AGNC INVESTMENT on November 7, 2024 and sell it today you would earn a total of 59.00 from holding AGNC INVESTMENT or generate 6.5% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
AGNC INVESTMENT vs. Booking Holdings
Performance |
| Timeline |
| AGNC INVESTMENT |
| Booking Holdings |
AGNC INVESTMENT and Booking Holdings Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with AGNC INVESTMENT and Booking Holdings
The main advantage of trading using opposite AGNC INVESTMENT and Booking Holdings positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if AGNC INVESTMENT position performs unexpectedly, Booking Holdings 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 Booking Holdings will offset losses from the drop in Booking Holdings' 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 |
| Booking Holdings vs. SENECA FOODS A | Booking Holdings vs. Tower Semiconductor | Booking Holdings vs. Taiwan Semiconductor Manufacturing | Booking Holdings vs. Cal Maine Foods |
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 Commodity Channel module to use Commodity Channel Index to analyze current equity momentum.
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