Correlation Between Brookfield Corp and AGNC Investment
Can any of the company-specific risk be diversified away by investing in both Brookfield Corp 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 Brookfield Corp and AGNC Investment into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Brookfield Corp and AGNC Investment Corp, you can compare the effects of market volatilities on Brookfield Corp 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 Brookfield Corp with a short position of AGNC Investment. Check out your portfolio center. Please also check ongoing floating volatility patterns of Brookfield Corp and AGNC Investment.
Diversification Opportunities for Brookfield Corp and AGNC Investment
0.85 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Brookfield and AGNC is 0.85. Overlapping area represents the amount of risk that can be diversified away by holding Brookfield Corp 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 Brookfield Corp 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 Brookfield Corp 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 Brookfield Corp i.e., Brookfield Corp and AGNC Investment go up and down completely randomly.
Pair Corralation between Brookfield Corp and AGNC Investment
Allowing for the 90-day total investment horizon Brookfield Corp is expected to generate 4.37 times more return on investment than AGNC Investment. However, Brookfield Corp is 4.37 times more volatile than AGNC Investment Corp. It trades about 0.26 of its potential returns per unit of risk. AGNC Investment Corp is currently generating about 0.12 per unit of risk. If you would invest 5,468 in Brookfield Corp on August 28, 2024 and sell it today you would earn a total of 502.00 from holding Brookfield Corp or generate 9.18% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Brookfield Corp vs. AGNC Investment Corp
Performance |
| Timeline |
| Brookfield Corp |
| AGNC Investment Corp |
Brookfield Corp and AGNC Investment Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Brookfield Corp and AGNC Investment
The main advantage of trading using opposite Brookfield Corp and AGNC Investment positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Brookfield Corp 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.| Brookfield Corp vs. KKR Co LP | Brookfield Corp vs. Blackstone Group | Brookfield Corp vs. T Rowe Price | Brookfield Corp vs. Apollo Global Management |
| AGNC Investment vs. AGNC Investment Corp | AGNC Investment vs. Aquagold International | AGNC Investment vs. Morningstar Unconstrained Allocation | AGNC Investment 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 Correlation Analysis module to reduce portfolio risk simply by holding instruments which are not perfectly correlated.
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