Correlation Between AGNC INVESTMENT and PRECISION DRILLING
Can any of the company-specific risk be diversified away by investing in both AGNC INVESTMENT and PRECISION DRILLING 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 PRECISION DRILLING into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between AGNC INVESTMENT and PRECISION DRILLING P, you can compare the effects of market volatilities on AGNC INVESTMENT and PRECISION DRILLING 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 PRECISION DRILLING. Check out your portfolio center. Please also check ongoing floating volatility patterns of AGNC INVESTMENT and PRECISION DRILLING.
Diversification Opportunities for AGNC INVESTMENT and PRECISION DRILLING
0.53 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between AGNC and PRECISION is 0.53. Overlapping area represents the amount of risk that can be diversified away by holding AGNC INVESTMENT and PRECISION DRILLING P in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on PRECISION DRILLING 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 PRECISION DRILLING. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of PRECISION DRILLING has no effect on the direction of AGNC INVESTMENT i.e., AGNC INVESTMENT and PRECISION DRILLING go up and down completely randomly.
Pair Corralation between AGNC INVESTMENT and PRECISION DRILLING
Assuming the 90 days trading horizon AGNC INVESTMENT is expected to generate 2.01 times less return on investment than PRECISION DRILLING. But when comparing it to its historical volatility, AGNC INVESTMENT is 1.9 times less risky than PRECISION DRILLING. It trades about 0.2 of its potential returns per unit of risk. PRECISION DRILLING P is currently generating about 0.22 of returns per unit of risk over similar time horizon. If you would invest 5,500 in PRECISION DRILLING P on October 29, 2024 and sell it today you would earn a total of 550.00 from holding PRECISION DRILLING P or generate 10.0% 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. PRECISION DRILLING P
Performance |
| Timeline |
| AGNC INVESTMENT |
| PRECISION DRILLING |
AGNC INVESTMENT and PRECISION DRILLING Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with AGNC INVESTMENT and PRECISION DRILLING
The main advantage of trading using opposite AGNC INVESTMENT and PRECISION DRILLING positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if AGNC INVESTMENT position performs unexpectedly, PRECISION DRILLING 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 PRECISION DRILLING will offset losses from the drop in PRECISION DRILLING's long position.| AGNC INVESTMENT vs. Sixt Leasing SE | AGNC INVESTMENT vs. Guangdong Investment Limited | AGNC INVESTMENT vs. New Residential Investment | AGNC INVESTMENT vs. FUYO GENERAL LEASE |
| PRECISION DRILLING vs. SHELF DRILLING LTD | PRECISION DRILLING vs. Superior Plus Corp | PRECISION DRILLING vs. Origin Agritech | PRECISION DRILLING vs. Identiv |
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 Portfolio Comparator module to compare the composition, asset allocations and performance of any two portfolios in your account.
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