Correlation Between AG Mortgage and FirstService Corp
Can any of the company-specific risk be diversified away by investing in both AG Mortgage and FirstService Corp 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 FirstService Corp 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 FirstService Corp, you can compare the effects of market volatilities on AG Mortgage and FirstService Corp 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 FirstService Corp. Check out your portfolio center. Please also check ongoing floating volatility patterns of AG Mortgage and FirstService Corp.
Diversification Opportunities for AG Mortgage and FirstService Corp
0.78 | Correlation Coefficient |
Poor diversification
The 3 months correlation between MITT-PB and FirstService is 0.78. Overlapping area represents the amount of risk that can be diversified away by holding AG Mortgage Investment and FirstService Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on FirstService Corp 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 FirstService Corp. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of FirstService Corp has no effect on the direction of AG Mortgage i.e., AG Mortgage and FirstService Corp go up and down completely randomly.
Pair Corralation between AG Mortgage and FirstService Corp
Assuming the 90 days trading horizon AG Mortgage Investment is expected to under-perform the FirstService Corp. But the preferred stock apears to be less risky and, when comparing its historical volatility, AG Mortgage Investment is 1.33 times less risky than FirstService Corp. The preferred stock trades about -0.09 of its potential returns per unit of risk. The FirstService Corp is currently generating about 0.17 of returns per unit of risk over similar time horizon. If you would invest 18,454 in FirstService Corp on August 24, 2024 and sell it today you would earn a total of 745.00 from holding FirstService Corp or generate 4.04% 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. FirstService Corp
Performance |
| Timeline |
| AG Mortgage Investment |
| FirstService Corp |
AG Mortgage and FirstService Corp Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with AG Mortgage and FirstService Corp
The main advantage of trading using opposite AG Mortgage and FirstService Corp positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if AG Mortgage position performs unexpectedly, FirstService Corp 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 FirstService Corp will offset losses from the drop in FirstService Corp'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 |
| FirstService Corp vs. Cushman Wakefield plc | FirstService Corp vs. CBRE Group Class | FirstService Corp vs. Jones Lang LaSalle | FirstService Corp vs. Marcus Millichap |
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 Global Markets Map module to get a quick overview of global market snapshot using zoomable world map. Drill down to check world indexes.
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