Correlation Between AG Mortgage and Extendicare
Can any of the company-specific risk be diversified away by investing in both AG Mortgage and Extendicare 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 Extendicare 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 Extendicare, you can compare the effects of market volatilities on AG Mortgage and Extendicare 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 Extendicare. Check out your portfolio center. Please also check ongoing floating volatility patterns of AG Mortgage and Extendicare.
Diversification Opportunities for AG Mortgage and Extendicare
-0.65 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between MITT-PA and Extendicare is -0.65. Overlapping area represents the amount of risk that can be diversified away by holding AG Mortgage Investment and Extendicare in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Extendicare 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 Extendicare. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Extendicare has no effect on the direction of AG Mortgage i.e., AG Mortgage and Extendicare go up and down completely randomly.
Pair Corralation between AG Mortgage and Extendicare
If you would invest 500.00 in Extendicare on August 30, 2024 and sell it today you would earn a total of 0.00 from holding Extendicare or generate 0.0% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 4.35% |
| Values | Daily Returns |
AG Mortgage Investment vs. Extendicare
Performance |
| Timeline |
| AG Mortgage Investment |
| Extendicare |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
AG Mortgage and Extendicare Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with AG Mortgage and Extendicare
The main advantage of trading using opposite AG Mortgage and Extendicare positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if AG Mortgage position performs unexpectedly, Extendicare 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 Extendicare will offset losses from the drop in Extendicare'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 |
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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 Portfolio Diagnostics module to use generated alerts and portfolio events aggregator to diagnose current holdings.
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