Correlation Between AG Mortgage and KKR Real
Can any of the company-specific risk be diversified away by investing in both AG Mortgage and KKR 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 KKR 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 KKR Real Estate, you can compare the effects of market volatilities on AG Mortgage and KKR 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 KKR Real. Check out your portfolio center. Please also check ongoing floating volatility patterns of AG Mortgage and KKR Real.
Diversification Opportunities for AG Mortgage and KKR Real
0.33 | Correlation Coefficient |
Weak diversification
The 3 months correlation between MITT-PA and KKR is 0.33. Overlapping area represents the amount of risk that can be diversified away by holding AG Mortgage Investment and KKR Real Estate in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on KKR 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 KKR Real. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of KKR Real Estate has no effect on the direction of AG Mortgage i.e., AG Mortgage and KKR Real go up and down completely randomly.
Pair Corralation between AG Mortgage and KKR Real
Assuming the 90 days trading horizon AG Mortgage Investment is expected to generate 0.62 times more return on investment than KKR Real. However, AG Mortgage Investment is 1.61 times less risky than KKR Real. It trades about 0.08 of its potential returns per unit of risk. KKR Real Estate is currently generating about 0.0 per unit of risk. If you would invest 1,380 in AG Mortgage Investment on August 23, 2024 and sell it today you would earn a total of 854.00 from holding AG Mortgage Investment or generate 61.88% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
AG Mortgage Investment vs. KKR Real Estate
Performance |
| Timeline |
| AG Mortgage Investment |
| KKR Real Estate |
AG Mortgage and KKR Real Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with AG Mortgage and KKR Real
The main advantage of trading using opposite AG Mortgage and KKR Real positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if AG Mortgage position performs unexpectedly, KKR 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 KKR Real will offset losses from the drop in KKR Real's long position.| AG Mortgage vs. Cherry Hill Mortgage | AG Mortgage vs. Chimera Investment | AG Mortgage vs. PennyMac Mortgage Investment | AG Mortgage vs. Lument Finance Trust |
| KKR Real vs. Ellington Financial | KKR Real vs. Dynex Capital | KKR Real vs. Ares Commercial Real | KKR Real vs. Cherry Hill Mortgage |
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 Manager module to state of the art Portfolio Manager to monitor and improve performance of your invested capital.
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