Correlation Between AGNC INVESTMENT and CarsalesCom
Can any of the company-specific risk be diversified away by investing in both AGNC INVESTMENT and CarsalesCom 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 CarsalesCom into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between AGNC INVESTMENT and CarsalesCom, you can compare the effects of market volatilities on AGNC INVESTMENT and CarsalesCom 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 CarsalesCom. Check out your portfolio center. Please also check ongoing floating volatility patterns of AGNC INVESTMENT and CarsalesCom.
Diversification Opportunities for AGNC INVESTMENT and CarsalesCom
0.19 | Correlation Coefficient |
Average diversification
The 3 months correlation between AGNC and CarsalesCom is 0.19. Overlapping area represents the amount of risk that can be diversified away by holding AGNC INVESTMENT and CarsalesCom in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on CarsalesCom 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 CarsalesCom. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of CarsalesCom has no effect on the direction of AGNC INVESTMENT i.e., AGNC INVESTMENT and CarsalesCom go up and down completely randomly.
Pair Corralation between AGNC INVESTMENT and CarsalesCom
Assuming the 90 days trading horizon AGNC INVESTMENT is expected to generate 654.5 times less return on investment than CarsalesCom. But when comparing it to its historical volatility, AGNC INVESTMENT is 1.1 times less risky than CarsalesCom. It trades about 0.0 of its potential returns per unit of risk. CarsalesCom is currently generating about 0.09 of returns per unit of risk over similar time horizon. If you would invest 2,240 in CarsalesCom on September 13, 2024 and sell it today you would earn a total of 120.00 from holding CarsalesCom or generate 5.36% 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. CarsalesCom
Performance |
| Timeline |
| AGNC INVESTMENT |
| CarsalesCom |
AGNC INVESTMENT and CarsalesCom Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with AGNC INVESTMENT and CarsalesCom
The main advantage of trading using opposite AGNC INVESTMENT and CarsalesCom positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if AGNC INVESTMENT position performs unexpectedly, CarsalesCom 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 CarsalesCom will offset losses from the drop in CarsalesCom's long position.| AGNC INVESTMENT vs. Apple Inc | AGNC INVESTMENT vs. Apple Inc | AGNC INVESTMENT vs. Apple Inc | AGNC INVESTMENT vs. Apple Inc |
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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 Stocks Directory module to find actively traded stocks across global markets.
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