Correlation Between Chimera Investment and AGNC Investment
Can any of the company-specific risk be diversified away by investing in both Chimera Investment 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 Chimera Investment and AGNC Investment into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Chimera Investment and AGNC Investment Corp, you can compare the effects of market volatilities on Chimera Investment 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 Chimera Investment with a short position of AGNC Investment. Check out your portfolio center. Please also check ongoing floating volatility patterns of Chimera Investment and AGNC Investment.
Diversification Opportunities for Chimera Investment and AGNC Investment
0.88 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Chimera and AGNC is 0.88. Overlapping area represents the amount of risk that can be diversified away by holding Chimera Investment 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 Chimera 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 Chimera Investment 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 Chimera Investment i.e., Chimera Investment and AGNC Investment go up and down completely randomly.
Pair Corralation between Chimera Investment and AGNC Investment
Assuming the 90 days trading horizon Chimera Investment is expected to generate 0.97 times more return on investment than AGNC Investment. However, Chimera Investment is 1.03 times less risky than AGNC Investment. It trades about 0.17 of its potential returns per unit of risk. AGNC Investment Corp is currently generating about -0.06 per unit of risk. If you would invest 2,470 in Chimera Investment on August 27, 2024 and sell it today you would earn a total of 28.00 from holding Chimera Investment or generate 1.13% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Chimera Investment vs. AGNC Investment Corp
Performance |
| Timeline |
| Chimera Investment |
| AGNC Investment Corp |
Chimera Investment and AGNC Investment Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Chimera Investment and AGNC Investment
The main advantage of trading using opposite Chimera Investment and AGNC Investment positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Chimera Investment 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.| Chimera Investment vs. Chimera Investment | Chimera Investment vs. PennyMac Mortgage Investment | Chimera Investment vs. Two Harbors Investment | Chimera Investment vs. Chimera Investment |
| AGNC Investment vs. Annaly Capital Management | AGNC Investment vs. AGNC Investment Corp | AGNC Investment vs. Invesco Mortgage Capital | AGNC Investment vs. Invesco Mortgage Capital |
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 Diagnostics module to use generated alerts and portfolio events aggregator to diagnose current holdings.
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