Correlation Between Ares Commercial and AGNC Investment
Can any of the company-specific risk be diversified away by investing in both Ares Commercial 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 Ares Commercial and AGNC Investment into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Ares Commercial Real and AGNC Investment Corp, you can compare the effects of market volatilities on Ares Commercial 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 Ares Commercial with a short position of AGNC Investment. Check out your portfolio center. Please also check ongoing floating volatility patterns of Ares Commercial and AGNC Investment.
Diversification Opportunities for Ares Commercial and AGNC Investment
0.04 | Correlation Coefficient |
Significant diversification
The 3 months correlation between Ares and AGNC is 0.04. Overlapping area represents the amount of risk that can be diversified away by holding Ares Commercial Real 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 Ares Commercial 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 Ares Commercial Real 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 Ares Commercial i.e., Ares Commercial and AGNC Investment go up and down completely randomly.
Pair Corralation between Ares Commercial and AGNC Investment
Given the investment horizon of 90 days Ares Commercial Real is expected to under-perform the AGNC Investment. In addition to that, Ares Commercial is 2.21 times more volatile than AGNC Investment Corp. It trades about -0.06 of its total potential returns per unit of risk. AGNC Investment Corp is currently generating about 0.4 per unit of volatility. If you would invest 928.00 in AGNC Investment Corp on November 2, 2024 and sell it today you would earn a total of 80.00 from holding AGNC Investment Corp or generate 8.62% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Ares Commercial Real vs. AGNC Investment Corp
Performance |
| Timeline |
| Ares Commercial Real |
| AGNC Investment Corp |
Ares Commercial and AGNC Investment Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Ares Commercial and AGNC Investment
The main advantage of trading using opposite Ares Commercial and AGNC Investment positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Ares Commercial 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.| Ares Commercial vs. Two Harbors Investments | Ares Commercial vs. Apollo Commercial Real | Ares Commercial vs. Ellington Financial | Ares Commercial vs. Dynex Capital |
| AGNC Investment vs. Two Harbors Investments | AGNC Investment vs. Chimera Investment | AGNC Investment vs. ARMOUR Residential REIT | AGNC Investment vs. Arbor Realty Trust |
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 My Watchlist Analysis module to analyze my current watchlist and to refresh optimization strategy. Macroaxis watchlist is based on self-learning algorithm to remember stocks you like.
Other Complementary Tools
| Competition Analyzer Analyze and compare many basic indicators for a group of related or unrelated entities | |
| Price Transformation Use Price Transformation models to analyze the depth of different equity instruments across global markets | |
| Efficient Frontier Plot and analyze your portfolio and positions against risk-return landscape of the market. | |
| ETFs Find actively traded Exchange Traded Funds (ETF) from around the world | |
| Fundamentals Comparison Compare fundamentals across multiple equities to find investing opportunities |