Correlation Between Moelis and AG Mortgage
Can any of the company-specific risk be diversified away by investing in both Moelis 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 Moelis and AG Mortgage into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Moelis Co and AG Mortgage Investment, you can compare the effects of market volatilities on Moelis 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 Moelis with a short position of AG Mortgage. Check out your portfolio center. Please also check ongoing floating volatility patterns of Moelis and AG Mortgage.
Diversification Opportunities for Moelis and AG Mortgage
-0.42 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Moelis and MITT is -0.42. Overlapping area represents the amount of risk that can be diversified away by holding Moelis Co 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 Moelis 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 Moelis Co 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 Moelis i.e., Moelis and AG Mortgage go up and down completely randomly.
Pair Corralation between Moelis and AG Mortgage
Allowing for the 90-day total investment horizon Moelis Co is expected to generate 1.01 times more return on investment than AG Mortgage. However, Moelis is 1.01 times more volatile than AG Mortgage Investment. It trades about 0.13 of its potential returns per unit of risk. AG Mortgage Investment is currently generating about 0.03 per unit of risk. If you would invest 7,486 in Moelis Co on November 4, 2024 and sell it today you would earn a total of 343.00 from holding Moelis Co or generate 4.58% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Moelis Co vs. AG Mortgage Investment
Performance |
| Timeline |
| Moelis |
| AG Mortgage Investment |
Moelis and AG Mortgage Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Moelis and AG Mortgage
The main advantage of trading using opposite Moelis and AG Mortgage positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Moelis 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.The idea behind Moelis Co and AG Mortgage Investment pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.| AG Mortgage vs. New York Mortgage | AG Mortgage vs. Ellington Residential Mortgage | AG Mortgage vs. Invesco Mortgage Capital | AG Mortgage vs. TPG RE Finance |
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 Stock Tickers module to use high-impact, comprehensive, and customizable stock tickers that can be easily integrated to any websites.
Other Complementary Tools
| Fundamentals Comparison Compare fundamentals across multiple equities to find investing opportunities | |
| Commodity Directory Find actively traded commodities issued by global exchanges | |
| Investing Opportunities Build portfolios using our predefined set of ideas and optimize them against your investing preferences | |
| Price Ceiling Movement Calculate and plot Price Ceiling Movement for different equity instruments | |
| Stocks Directory Find actively traded stocks across global markets |