Correlation Between AGNC Investment and Cherry Hill
Can any of the company-specific risk be diversified away by investing in both AGNC Investment and Cherry Hill 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 Cherry Hill into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between AGNC Investment Corp and Cherry Hill Mortgage, you can compare the effects of market volatilities on AGNC Investment and Cherry Hill 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 Cherry Hill. Check out your portfolio center. Please also check ongoing floating volatility patterns of AGNC Investment and Cherry Hill.
Diversification Opportunities for AGNC Investment and Cherry Hill
0.35 | Correlation Coefficient |
Weak diversification
The 3 months correlation between AGNC and Cherry is 0.35. Overlapping area represents the amount of risk that can be diversified away by holding AGNC Investment Corp and Cherry Hill Mortgage in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Cherry Hill Mortgage 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 Corp are associated (or correlated) with Cherry Hill. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Cherry Hill Mortgage has no effect on the direction of AGNC Investment i.e., AGNC Investment and Cherry Hill go up and down completely randomly.
Pair Corralation between AGNC Investment and Cherry Hill
Given the investment horizon of 90 days AGNC Investment is expected to generate 8.95 times less return on investment than Cherry Hill. But when comparing it to its historical volatility, AGNC Investment Corp is 2.54 times less risky than Cherry Hill. It trades about 0.05 of its potential returns per unit of risk. Cherry Hill Mortgage is currently generating about 0.18 of returns per unit of risk over similar time horizon. If you would invest 252.00 in Cherry Hill Mortgage on October 20, 2024 and sell it today you would earn a total of 48.00 from holding Cherry Hill Mortgage or generate 19.05% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
AGNC Investment Corp vs. Cherry Hill Mortgage
Performance |
| Timeline |
| AGNC Investment Corp |
| Cherry Hill Mortgage |
AGNC Investment and Cherry Hill Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with AGNC Investment and Cherry Hill
The main advantage of trading using opposite AGNC Investment and Cherry Hill positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if AGNC Investment position performs unexpectedly, Cherry Hill 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 Cherry Hill will offset losses from the drop in Cherry Hill's long position.| AGNC Investment vs. Two Harbors Investments | AGNC Investment vs. Chimera Investment | AGNC Investment vs. ARMOUR Residential REIT | AGNC Investment vs. Arbor Realty Trust |
| Cherry Hill vs. Ellington Financial | Cherry Hill vs. Dynex Capital | Cherry Hill vs. Ares Commercial Real | Cherry Hill 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 Sync Your Broker module to sync your existing holdings, watchlists, positions or portfolios from thousands of online brokerage services, banks, investment account aggregators and robo-advisors..
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