Correlation Between Arlington Asset and AGNC Investment
Can any of the company-specific risk be diversified away by investing in both Arlington Asset and AGNC Investment 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 Arlington Asset and AGNC Investment into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Arlington Asset Investment and AGNC Investment Corp, you can compare the effects of market volatilities on Arlington Asset and AGNC Investment 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 Arlington Asset with a short position of AGNC Investment. Check out your portfolio center. Please also check ongoing floating volatility patterns of Arlington Asset and AGNC Investment.
Diversification Opportunities for Arlington Asset and AGNC Investment
0.88 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Arlington and AGNC is 0.88. Overlapping area represents the amount of risk that can be diversified away by holding Arlington Asset Investment and AGNC Investment Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on AGNC Investment Corp and Arlington Asset 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 Arlington Asset Investment are associated (or correlated) with AGNC Investment. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of AGNC Investment Corp has no effect on the direction of Arlington Asset i.e., Arlington Asset and AGNC Investment go up and down completely randomly.
Pair Corralation between Arlington Asset and AGNC Investment
If you would invest 2,567 in AGNC Investment Corp on August 28, 2024 and sell it today you would earn a total of 20.00 from holding AGNC Investment Corp or generate 0.78% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 4.76% |
| Values | Daily Returns |
Arlington Asset Investment vs. AGNC Investment Corp
Performance |
| Timeline |
| Arlington Asset Inve |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
| AGNC Investment Corp |
Arlington Asset and AGNC Investment Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Arlington Asset and AGNC Investment
The main advantage of trading using opposite Arlington Asset and AGNC Investment positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Arlington Asset position performs unexpectedly, AGNC Investment 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 AGNC Investment will offset losses from the drop in AGNC Investment's long position.| Arlington Asset vs. ACRES Commercial Realty | Arlington Asset vs. ACRES Commercial Realty | Arlington Asset vs. Cherry Hill Mortgage | Arlington Asset vs. Nexpoint Real Estate |
| AGNC Investment vs. Annaly Capital Management | AGNC Investment vs. Invesco Mortgage Capital | AGNC Investment vs. Invesco Mortgage Capital | AGNC Investment vs. Chimera Investment |
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 USA ETFs module to find actively traded Exchange Traded Funds (ETF) in USA.
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