Correlation Between Extendicare and AG Mortgage
Can any of the company-specific risk be diversified away by investing in both Extendicare and AG Mortgage 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 Extendicare and AG Mortgage into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Extendicare and AG Mortgage Investment, you can compare the effects of market volatilities on Extendicare and AG Mortgage 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 Extendicare with a short position of AG Mortgage. Check out your portfolio center. Please also check ongoing floating volatility patterns of Extendicare and AG Mortgage.
Diversification Opportunities for Extendicare and AG Mortgage
-0.53 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Extendicare and MITT-PB is -0.53. Overlapping area represents the amount of risk that can be diversified away by holding Extendicare and AG Mortgage Investment in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on AG Mortgage Investment and Extendicare 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 Extendicare are associated (or correlated) with AG Mortgage. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of AG Mortgage Investment has no effect on the direction of Extendicare i.e., Extendicare and AG Mortgage go up and down completely randomly.
Pair Corralation between Extendicare and AG Mortgage
If you would invest 2,037 in AG Mortgage Investment on August 23, 2024 and sell it today you would earn a total of 201.00 from holding AG Mortgage Investment or generate 9.87% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 1.56% |
| Values | Daily Returns |
Extendicare vs. AG Mortgage Investment
Performance |
| Timeline |
| Extendicare |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
| AG Mortgage Investment |
Extendicare and AG Mortgage Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Extendicare and AG Mortgage
The main advantage of trading using opposite Extendicare and AG Mortgage positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Extendicare position performs unexpectedly, AG Mortgage 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 AG Mortgage will offset losses from the drop in AG Mortgage's long position.| Extendicare vs. Ramsay Health Care | Extendicare vs. Jack Nathan Medical | Extendicare vs. Nova Leap Health | Extendicare vs. Fresenius SE Co |
| AG Mortgage vs. Cherry Hill Mortgage | AG Mortgage vs. Chimera Investment | AG Mortgage vs. PennyMac Mortgage Investment | AG Mortgage vs. Lument Finance Trust |
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 Stocks Directory module to find actively traded stocks across global markets.
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