Correlation Between AGNC INVESTMENT and WESTERN DIGITAL
Can any of the company-specific risk be diversified away by investing in both AGNC INVESTMENT and WESTERN DIGITAL 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 WESTERN DIGITAL into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between AGNC INVESTMENT and WESTERN DIGITAL , you can compare the effects of market volatilities on AGNC INVESTMENT and WESTERN DIGITAL 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 WESTERN DIGITAL. Check out your portfolio center. Please also check ongoing floating volatility patterns of AGNC INVESTMENT and WESTERN DIGITAL.
Diversification Opportunities for AGNC INVESTMENT and WESTERN DIGITAL
0.17 | Correlation Coefficient |
Average diversification
The 3 months correlation between AGNC and WESTERN is 0.17. Overlapping area represents the amount of risk that can be diversified away by holding AGNC INVESTMENT and WESTERN DIGITAL in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on WESTERN DIGITAL 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 WESTERN DIGITAL. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of WESTERN DIGITAL has no effect on the direction of AGNC INVESTMENT i.e., AGNC INVESTMENT and WESTERN DIGITAL go up and down completely randomly.
Pair Corralation between AGNC INVESTMENT and WESTERN DIGITAL
Assuming the 90 days trading horizon AGNC INVESTMENT is expected to generate 0.46 times more return on investment than WESTERN DIGITAL. However, AGNC INVESTMENT is 2.18 times less risky than WESTERN DIGITAL. It trades about 0.22 of its potential returns per unit of risk. WESTERN DIGITAL is currently generating about 0.1 per unit of risk. If you would invest 883.00 in AGNC INVESTMENT on October 31, 2024 and sell it today you would earn a total of 51.00 from holding AGNC INVESTMENT or generate 5.78% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
AGNC INVESTMENT vs. WESTERN DIGITAL
Performance |
| Timeline |
| AGNC INVESTMENT |
| WESTERN DIGITAL |
AGNC INVESTMENT and WESTERN DIGITAL Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with AGNC INVESTMENT and WESTERN DIGITAL
The main advantage of trading using opposite AGNC INVESTMENT and WESTERN DIGITAL positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if AGNC INVESTMENT position performs unexpectedly, WESTERN DIGITAL 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 WESTERN DIGITAL will offset losses from the drop in WESTERN DIGITAL's long position.| AGNC INVESTMENT vs. REGAL HOTEL INTL | AGNC INVESTMENT vs. PPHE HOTEL GROUP | AGNC INVESTMENT vs. Meli Hotels International | AGNC INVESTMENT vs. Micron 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 Portfolio Backtesting module to avoid under-diversification and over-optimization by backtesting your portfolios.
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