Correlation Between Ladder Capital and AGNC Investment
Can any of the company-specific risk be diversified away by investing in both Ladder Capital 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 Ladder Capital and AGNC Investment into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Ladder Capital Corp and AGNC Investment Corp, you can compare the effects of market volatilities on Ladder Capital 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 Ladder Capital with a short position of AGNC Investment. Check out your portfolio center. Please also check ongoing floating volatility patterns of Ladder Capital and AGNC Investment.
Diversification Opportunities for Ladder Capital and AGNC Investment
-0.46 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Ladder and AGNC is -0.46. Overlapping area represents the amount of risk that can be diversified away by holding Ladder Capital 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 Ladder Capital 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 Ladder Capital 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 Ladder Capital i.e., Ladder Capital and AGNC Investment go up and down completely randomly.
Pair Corralation between Ladder Capital and AGNC Investment
Given the investment horizon of 90 days Ladder Capital Corp is expected to generate 2.79 times more return on investment than AGNC Investment. However, Ladder Capital is 2.79 times more volatile than AGNC Investment Corp. It trades about 0.16 of its potential returns per unit of risk. AGNC Investment Corp is currently generating about 0.09 per unit of risk. If you would invest 1,129 in Ladder Capital Corp on August 28, 2024 and sell it today you would earn a total of 43.00 from holding Ladder Capital Corp or generate 3.81% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Ladder Capital Corp vs. AGNC Investment Corp
Performance |
| Timeline |
| Ladder Capital Corp |
| AGNC Investment Corp |
Ladder Capital and AGNC Investment Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Ladder Capital and AGNC Investment
The main advantage of trading using opposite Ladder Capital and AGNC Investment positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Ladder Capital 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.| Ladder Capital vs. KKR Real Estate | Ladder Capital vs. Ares Commercial Real | Ladder Capital vs. Ellington Residential Mortgage | Ladder Capital vs. Claros Mortgage Trust |
| AGNC Investment vs. Annaly Capital Management | AGNC Investment vs. Invesco Mortgage Capital | AGNC Investment vs. Invesco Mortgage Capital | AGNC Investment vs. Chimera Investment |
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 Top Crypto Exchanges module to search and analyze digital assets across top global cryptocurrency exchanges.
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