Correlation Between AG Mortgage and Prologis
Can any of the company-specific risk be diversified away by investing in both AG Mortgage and Prologis 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 Prologis 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 Prologis, you can compare the effects of market volatilities on AG Mortgage and Prologis 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 Prologis. Check out your portfolio center. Please also check ongoing floating volatility patterns of AG Mortgage and Prologis.
Diversification Opportunities for AG Mortgage and Prologis
-0.38 | Correlation Coefficient |
Very good diversification
The 3 months correlation between MITT-PA and Prologis is -0.38. Overlapping area represents the amount of risk that can be diversified away by holding AG Mortgage Investment and Prologis in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Prologis 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 Prologis. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Prologis has no effect on the direction of AG Mortgage i.e., AG Mortgage and Prologis go up and down completely randomly.
Pair Corralation between AG Mortgage and Prologis
Assuming the 90 days trading horizon AG Mortgage Investment is expected to generate 0.75 times more return on investment than Prologis. However, AG Mortgage Investment is 1.34 times less risky than Prologis. It trades about 0.1 of its potential returns per unit of risk. Prologis is currently generating about 0.0 per unit of risk. If you would invest 1,444 in AG Mortgage Investment on August 31, 2024 and sell it today you would earn a total of 801.00 from holding AG Mortgage Investment or generate 55.47% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
AG Mortgage Investment vs. Prologis
Performance |
| Timeline |
| AG Mortgage Investment |
| Prologis |
AG Mortgage and Prologis Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with AG Mortgage and Prologis
The main advantage of trading using opposite AG Mortgage and Prologis positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if AG Mortgage position performs unexpectedly, Prologis 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 Prologis will offset losses from the drop in Prologis' 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 Money Managers module to screen money managers from public funds and ETFs managed around the world.
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