Correlation Between Cars and AGNC INVESTMENT
Can any of the company-specific risk be diversified away by investing in both Cars 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 Cars and AGNC INVESTMENT into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Cars Inc and AGNC INVESTMENT, you can compare the effects of market volatilities on Cars 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 Cars with a short position of AGNC INVESTMENT. Check out your portfolio center. Please also check ongoing floating volatility patterns of Cars and AGNC INVESTMENT.
Diversification Opportunities for Cars and AGNC INVESTMENT
0.15 | Correlation Coefficient |
Average diversification
The 3 months correlation between Cars and AGNC is 0.15. Overlapping area represents the amount of risk that can be diversified away by holding Cars Inc and AGNC INVESTMENT in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on AGNC INVESTMENT and Cars 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 Cars Inc 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 has no effect on the direction of Cars i.e., Cars and AGNC INVESTMENT go up and down completely randomly.
Pair Corralation between Cars and AGNC INVESTMENT
Assuming the 90 days horizon Cars Inc is expected to generate 1.77 times more return on investment than AGNC INVESTMENT. However, Cars is 1.77 times more volatile than AGNC INVESTMENT. It trades about 0.03 of its potential returns per unit of risk. AGNC INVESTMENT is currently generating about 0.03 per unit of risk. If you would invest 1,380 in Cars Inc on October 7, 2024 and sell it today you would earn a total of 250.00 from holding Cars Inc or generate 18.12% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Cars Inc vs. AGNC INVESTMENT
Performance |
| Timeline |
| Cars Inc |
| AGNC INVESTMENT |
Cars and AGNC INVESTMENT Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Cars and AGNC INVESTMENT
The main advantage of trading using opposite Cars and AGNC INVESTMENT positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Cars 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.| Cars vs. Penske Automotive Group | Cars vs. Superior Plus Corp | Cars vs. NMI Holdings | Cars vs. SIVERS SEMICONDUCTORS AB |
| AGNC INVESTMENT vs. Apple Inc | AGNC INVESTMENT vs. Apple Inc | AGNC INVESTMENT vs. Apple Inc | AGNC INVESTMENT vs. Apple Inc |
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 Fundamental Analysis module to view fundamental data based on most recent published financial statements.
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