Correlation Between Associated Capital and AG Mortgage
Can any of the company-specific risk be diversified away by investing in both Associated Capital and AG Mortgage 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 Associated Capital and AG Mortgage into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Associated Capital Group and AG Mortgage Investment, you can compare the effects of market volatilities on Associated Capital and AG Mortgage 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 Associated Capital with a short position of AG Mortgage. Check out your portfolio center. Please also check ongoing floating volatility patterns of Associated Capital and AG Mortgage.
Diversification Opportunities for Associated Capital and AG Mortgage
-0.33 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Associated and MITP is -0.33. Overlapping area represents the amount of risk that can be diversified away by holding Associated Capital Group and AG Mortgage Investment in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on AG Mortgage Investment and Associated Capital 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 Associated Capital Group are associated (or correlated) with AG Mortgage. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of AG Mortgage Investment has no effect on the direction of Associated Capital i.e., Associated Capital and AG Mortgage go up and down completely randomly.
Pair Corralation between Associated Capital and AG Mortgage
Allowing for the 90-day total investment horizon Associated Capital Group is expected to generate 2.86 times more return on investment than AG Mortgage. However, Associated Capital is 2.86 times more volatile than AG Mortgage Investment. It trades about 0.15 of its potential returns per unit of risk. AG Mortgage Investment is currently generating about -0.11 per unit of risk. If you would invest 3,498 in Associated Capital Group on November 3, 2024 and sell it today you would earn a total of 159.00 from holding Associated Capital Group or generate 4.55% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Associated Capital Group vs. AG Mortgage Investment
Performance |
| Timeline |
| Associated Capital |
| AG Mortgage Investment |
Associated Capital and AG Mortgage Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Associated Capital and AG Mortgage
The main advantage of trading using opposite Associated Capital and AG Mortgage positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Associated Capital position performs unexpectedly, AG Mortgage 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 AG Mortgage will offset losses from the drop in AG Mortgage's long position.| Associated Capital vs. Hudson Acquisition I | Associated Capital vs. Marblegate Acquisition Corp | Associated Capital vs. Alpha One | Associated Capital vs. Manaris Corp |
| AG Mortgage vs. Inhibrx | AG Mortgage vs. Genfit | AG Mortgage vs. Cardinal Health | AG Mortgage vs. Viemed Healthcare |
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 Center module to all portfolio management and optimization tools to improve performance of your portfolios.
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