Correlation Between AG Mortgage and Healthcare Trust
Can any of the company-specific risk be diversified away by investing in both AG Mortgage and Healthcare Trust 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 Healthcare Trust 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 Healthcare Trust PR, you can compare the effects of market volatilities on AG Mortgage and Healthcare Trust 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 Healthcare Trust. Check out your portfolio center. Please also check ongoing floating volatility patterns of AG Mortgage and Healthcare Trust.
Diversification Opportunities for AG Mortgage and Healthcare Trust
0.81 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between MITT-PC and Healthcare is 0.81. Overlapping area represents the amount of risk that can be diversified away by holding AG Mortgage Investment and Healthcare Trust PR in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Healthcare Trust 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 Healthcare Trust. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Healthcare Trust has no effect on the direction of AG Mortgage i.e., AG Mortgage and Healthcare Trust go up and down completely randomly.
Pair Corralation between AG Mortgage and Healthcare Trust
Assuming the 90 days trading horizon AG Mortgage Investment is expected to generate 0.31 times more return on investment than Healthcare Trust. However, AG Mortgage Investment is 3.21 times less risky than Healthcare Trust. It trades about 0.18 of its potential returns per unit of risk. Healthcare Trust PR is currently generating about 0.02 per unit of risk. If you would invest 1,568 in AG Mortgage Investment on August 27, 2024 and sell it today you would earn a total of 960.00 from holding AG Mortgage Investment or generate 61.22% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
AG Mortgage Investment vs. Healthcare Trust PR
Performance |
| Timeline |
| AG Mortgage Investment |
| Healthcare Trust |
AG Mortgage and Healthcare Trust Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with AG Mortgage and Healthcare Trust
The main advantage of trading using opposite AG Mortgage and Healthcare Trust positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if AG Mortgage position performs unexpectedly, Healthcare Trust 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 Healthcare Trust will offset losses from the drop in Healthcare Trust's long position.| AG Mortgage vs. Annaly Capital Management | AG Mortgage vs. AGNC Investment Corp | AG Mortgage vs. Invesco Mortgage Capital | AG Mortgage vs. Invesco Mortgage Capital |
| Healthcare Trust vs. Gladstone Commercial Corp | Healthcare Trust vs. Medalist Diversified Reit | Healthcare Trust vs. Heartland Financial USA | Healthcare Trust vs. Sotherly Hotels PR |
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 ETFs module to find actively traded Exchange Traded Funds (ETF) from around the world.
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