Correlation Between AGNC INVESTMENT and RELIANCE STEEL
Can any of the company-specific risk be diversified away by investing in both AGNC INVESTMENT and RELIANCE STEEL 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 RELIANCE STEEL into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between AGNC INVESTMENT and RELIANCE STEEL AL, you can compare the effects of market volatilities on AGNC INVESTMENT and RELIANCE STEEL 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 RELIANCE STEEL. Check out your portfolio center. Please also check ongoing floating volatility patterns of AGNC INVESTMENT and RELIANCE STEEL.
Diversification Opportunities for AGNC INVESTMENT and RELIANCE STEEL
-0.17 | Correlation Coefficient |
Good diversification
The 3 months correlation between AGNC and RELIANCE is -0.17. Overlapping area represents the amount of risk that can be diversified away by holding AGNC INVESTMENT and RELIANCE STEEL AL in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on RELIANCE STEEL AL 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 RELIANCE STEEL. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of RELIANCE STEEL AL has no effect on the direction of AGNC INVESTMENT i.e., AGNC INVESTMENT and RELIANCE STEEL go up and down completely randomly.
Pair Corralation between AGNC INVESTMENT and RELIANCE STEEL
Assuming the 90 days trading horizon AGNC INVESTMENT is expected to generate 1.16 times less return on investment than RELIANCE STEEL. In addition to that, AGNC INVESTMENT is 1.35 times more volatile than RELIANCE STEEL AL. It trades about 0.22 of its total potential returns per unit of risk. RELIANCE STEEL AL is currently generating about 0.34 per unit of volatility. If you would invest 25,990 in RELIANCE STEEL AL on November 4, 2024 and sell it today you would earn a total of 1,910 from holding RELIANCE STEEL AL or generate 7.35% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
AGNC INVESTMENT vs. RELIANCE STEEL AL
Performance |
| Timeline |
| AGNC INVESTMENT |
| RELIANCE STEEL AL |
AGNC INVESTMENT and RELIANCE STEEL Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with AGNC INVESTMENT and RELIANCE STEEL
The main advantage of trading using opposite AGNC INVESTMENT and RELIANCE STEEL positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if AGNC INVESTMENT position performs unexpectedly, RELIANCE STEEL 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 RELIANCE STEEL will offset losses from the drop in RELIANCE STEEL'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 |
| RELIANCE STEEL vs. SCIENCE IN SPORT | RELIANCE STEEL vs. SOEDER SPORTFISKE AB | RELIANCE STEEL vs. SPORT LISBOA E | RELIANCE STEEL vs. ANTA SPORTS PRODUCT |
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 Sectors module to list of equity sectors categorizing publicly traded companies based on their primary business activities.
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