Correlation Between AGNC Investment and Franklin BSP
Can any of the company-specific risk be diversified away by investing in both AGNC Investment and Franklin BSP 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 Franklin BSP 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 Franklin BSP Realty, you can compare the effects of market volatilities on AGNC Investment and Franklin BSP 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 Franklin BSP. Check out your portfolio center. Please also check ongoing floating volatility patterns of AGNC Investment and Franklin BSP.
Diversification Opportunities for AGNC Investment and Franklin BSP
0.05 | Correlation Coefficient |
Significant diversification
The 3 months correlation between AGNC and Franklin is 0.05. Overlapping area represents the amount of risk that can be diversified away by holding AGNC Investment Corp and Franklin BSP Realty in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Franklin BSP Realty 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 Franklin BSP. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Franklin BSP Realty has no effect on the direction of AGNC Investment i.e., AGNC Investment and Franklin BSP go up and down completely randomly.
Pair Corralation between AGNC Investment and Franklin BSP
Assuming the 90 days horizon AGNC Investment Corp is expected to generate 0.38 times more return on investment than Franklin BSP. However, AGNC Investment Corp is 2.64 times less risky than Franklin BSP. It trades about 0.09 of its potential returns per unit of risk. Franklin BSP Realty is currently generating about 0.0 per unit of risk. 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 | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
AGNC Investment Corp vs. Franklin BSP Realty
Performance |
| Timeline |
| AGNC Investment Corp |
| Franklin BSP Realty |
AGNC Investment and Franklin BSP Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with AGNC Investment and Franklin BSP
The main advantage of trading using opposite AGNC Investment and Franklin BSP positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if AGNC Investment position performs unexpectedly, Franklin BSP 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 Franklin BSP will offset losses from the drop in Franklin BSP's long position.| AGNC Investment vs. Annaly Capital Management | AGNC Investment vs. Invesco Mortgage Capital | AGNC Investment vs. Invesco Mortgage Capital | AGNC Investment vs. Chimera Investment |
| Franklin BSP vs. AGNC Investment Corp | Franklin BSP vs. Aquagold International | Franklin BSP vs. Morningstar Unconstrained Allocation | Franklin BSP vs. Thrivent High Yield |
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 Global Correlations module to find global opportunities by holding instruments from different markets.
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