Correlation Between AG Mortgage and Dunham Real
Can any of the company-specific risk be diversified away by investing in both AG Mortgage and Dunham Real 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 AG Mortgage and Dunham Real into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between AG Mortgage Investment and Dunham Real Estate, you can compare the effects of market volatilities on AG Mortgage and Dunham Real 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 AG Mortgage with a short position of Dunham Real. Check out your portfolio center. Please also check ongoing floating volatility patterns of AG Mortgage and Dunham Real.
Diversification Opportunities for AG Mortgage and Dunham Real
0.67 | Correlation Coefficient |
Poor diversification
The 3 months correlation between MITT-PA and Dunham is 0.67. Overlapping area represents the amount of risk that can be diversified away by holding AG Mortgage Investment and Dunham Real Estate in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Dunham Real Estate and AG Mortgage 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 AG Mortgage Investment are associated (or correlated) with Dunham Real. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Dunham Real Estate has no effect on the direction of AG Mortgage i.e., AG Mortgage and Dunham Real go up and down completely randomly.
Pair Corralation between AG Mortgage and Dunham Real
Assuming the 90 days trading horizon AG Mortgage Investment is expected to generate 1.01 times more return on investment than Dunham Real. However, AG Mortgage is 1.01 times more volatile than Dunham Real Estate. It trades about 0.09 of its potential returns per unit of risk. Dunham Real Estate is currently generating about 0.06 per unit of risk. If you would invest 1,528 in AG Mortgage Investment on September 1, 2024 and sell it today you would earn a total of 658.00 from holding AG Mortgage Investment or generate 43.06% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
AG Mortgage Investment vs. Dunham Real Estate
Performance |
| Timeline |
| AG Mortgage Investment |
| Dunham Real Estate |
AG Mortgage and Dunham Real Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with AG Mortgage and Dunham Real
The main advantage of trading using opposite AG Mortgage and Dunham Real positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if AG Mortgage position performs unexpectedly, Dunham Real 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 Dunham Real will offset losses from the drop in Dunham Real's long position.| AG Mortgage vs. New York Mortgage | AG Mortgage vs. New York Mortgage | AG Mortgage vs. Two Harbors Investment | AG Mortgage vs. Two Harbors Investment |
| Dunham Real vs. Touchstone Small Cap | Dunham Real vs. Small Midcap Dividend Income | Dunham Real vs. Baird Smallmid Cap | Dunham Real vs. Us Small Cap |
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 Headlines Timeline module to stay connected to all market stories and filter out noise. Drill down to analyze hype elasticity.
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