Correlation Between AG Mortgage and Inpoint Commercial
Can any of the company-specific risk be diversified away by investing in both AG Mortgage and Inpoint Commercial 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 Inpoint Commercial 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 Inpoint Commercial Real, you can compare the effects of market volatilities on AG Mortgage and Inpoint Commercial 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 Inpoint Commercial. Check out your portfolio center. Please also check ongoing floating volatility patterns of AG Mortgage and Inpoint Commercial.
Diversification Opportunities for AG Mortgage and Inpoint Commercial
0.77 | Correlation Coefficient |
Poor diversification
The 3 months correlation between MITT-PB and Inpoint is 0.77. Overlapping area represents the amount of risk that can be diversified away by holding AG Mortgage Investment and Inpoint Commercial Real in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Inpoint Commercial Real 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 Inpoint Commercial. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Inpoint Commercial Real has no effect on the direction of AG Mortgage i.e., AG Mortgage and Inpoint Commercial go up and down completely randomly.
Pair Corralation between AG Mortgage and Inpoint Commercial
Assuming the 90 days trading horizon AG Mortgage Investment is expected to under-perform the Inpoint Commercial. But the preferred stock apears to be less risky and, when comparing its historical volatility, AG Mortgage Investment is 1.35 times less risky than Inpoint Commercial. The preferred stock trades about -0.16 of its potential returns per unit of risk. The Inpoint Commercial Real is currently generating about -0.1 of returns per unit of risk over similar time horizon. If you would invest 2,185 in Inpoint Commercial Real on September 1, 2024 and sell it today you would lose (65.00) from holding Inpoint Commercial Real or give up 2.97% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
AG Mortgage Investment vs. Inpoint Commercial Real
Performance |
| Timeline |
| AG Mortgage Investment |
| Inpoint Commercial Real |
AG Mortgage and Inpoint Commercial Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with AG Mortgage and Inpoint Commercial
The main advantage of trading using opposite AG Mortgage and Inpoint Commercial positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if AG Mortgage position performs unexpectedly, Inpoint Commercial 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 Inpoint Commercial will offset losses from the drop in Inpoint Commercial'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 |
| Inpoint Commercial vs. Invesco Mortgage Capital | Inpoint Commercial vs. ARMOUR Residential REIT | Inpoint Commercial vs. Chimera Investment | Inpoint Commercial 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 Balance Of Power module to check stock momentum by analyzing Balance Of Power indicator and other technical ratios.
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