Correlation Between Global Net and AGNC Investment
Can any of the company-specific risk be diversified away by investing in both Global Net 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 Global Net and AGNC Investment into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Global Net Lease and AGNC Investment Corp, you can compare the effects of market volatilities on Global Net 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 Global Net with a short position of AGNC Investment. Check out your portfolio center. Please also check ongoing floating volatility patterns of Global Net and AGNC Investment.
Diversification Opportunities for Global Net and AGNC Investment
0.06 | Correlation Coefficient |
Significant diversification
The 3 months correlation between Global and AGNC is 0.06. Overlapping area represents the amount of risk that can be diversified away by holding Global Net Lease 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 Global Net 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 Global Net Lease 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 Global Net i.e., Global Net and AGNC Investment go up and down completely randomly.
Pair Corralation between Global Net and AGNC Investment
Assuming the 90 days trading horizon Global Net Lease is expected to under-perform the AGNC Investment. In addition to that, Global Net is 5.34 times more volatile than AGNC Investment Corp. It trades about -0.02 of its total potential returns per unit of risk. AGNC Investment Corp is currently generating about 0.15 per unit of volatility. If you would invest 2,515 in AGNC Investment Corp on August 30, 2024 and sell it today you would earn a total of 21.00 from holding AGNC Investment Corp or generate 0.83% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Global Net Lease vs. AGNC Investment Corp
Performance |
| Timeline |
| Global Net Lease |
| AGNC Investment Corp |
Global Net and AGNC Investment Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Global Net and AGNC Investment
The main advantage of trading using opposite Global Net and AGNC Investment positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Global Net 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.| Global Net vs. Global Net Lease | Global Net vs. Global Medical REIT | Global Net vs. City Office REIT | Global Net vs. ARMOUR Residential REIT |
| AGNC Investment vs. AGNC Investment Corp | AGNC Investment vs. AGNC Investment Corp | AGNC Investment vs. AGNC Investment Corp | AGNC Investment vs. Annaly Capital Management |
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 Odds Of Bankruptcy module to get analysis of equity chance of financial distress in the next 2 years.
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