Correlation Between AG Mortgage and Invesco Real
Can any of the company-specific risk be diversified away by investing in both AG Mortgage and Invesco 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 Invesco 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 Invesco Real Estate, you can compare the effects of market volatilities on AG Mortgage and Invesco 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 Invesco Real. Check out your portfolio center. Please also check ongoing floating volatility patterns of AG Mortgage and Invesco Real.
Diversification Opportunities for AG Mortgage and Invesco Real
-0.68 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between MITT-PC and Invesco is -0.68. Overlapping area represents the amount of risk that can be diversified away by holding AG Mortgage Investment and Invesco Real Estate in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Invesco 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 Invesco Real. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Invesco Real Estate has no effect on the direction of AG Mortgage i.e., AG Mortgage and Invesco Real go up and down completely randomly.
Pair Corralation between AG Mortgage and Invesco Real
Assuming the 90 days trading horizon AG Mortgage is expected to generate 1.72 times less return on investment than Invesco Real. But when comparing it to its historical volatility, AG Mortgage Investment is 4.84 times less risky than Invesco Real. It trades about 0.27 of its potential returns per unit of risk. Invesco Real Estate is currently generating about 0.1 of returns per unit of risk over similar time horizon. If you would invest 1,675 in Invesco Real Estate on October 23, 2024 and sell it today you would earn a total of 33.00 from holding Invesco Real Estate or generate 1.97% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
AG Mortgage Investment vs. Invesco Real Estate
Performance |
| Timeline |
| AG Mortgage Investment |
| Invesco Real Estate |
AG Mortgage and Invesco Real Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with AG Mortgage and Invesco Real
The main advantage of trading using opposite AG Mortgage and Invesco Real positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if AG Mortgage position performs unexpectedly, Invesco 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 Invesco Real will offset losses from the drop in Invesco Real's long position.| AG Mortgage vs. AG Mortgage Investment | AG Mortgage vs. AG Mortgage Investment | AG Mortgage vs. MFA Financial | AG Mortgage vs. Invesco Mortgage Capital |
| Invesco Real vs. Artisan Developing World | Invesco Real vs. Goldman Sachs Local | Invesco Real vs. Investec Emerging Markets | Invesco Real vs. Kinetics Market Opportunities |
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 Analyzer module to portfolio analysis module that provides access to portfolio diagnostics and optimization engine.
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