Correlation Between AG Mortgage and Realty Income
Can any of the company-specific risk be diversified away by investing in both AG Mortgage and Realty Income 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 Realty Income 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 Realty Income, you can compare the effects of market volatilities on AG Mortgage and Realty Income 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 Realty Income. Check out your portfolio center. Please also check ongoing floating volatility patterns of AG Mortgage and Realty Income.
Diversification Opportunities for AG Mortgage and Realty Income
-0.52 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between MITT-PC and Realty is -0.52. Overlapping area represents the amount of risk that can be diversified away by holding AG Mortgage Investment and Realty Income in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Realty Income 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 Realty Income. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Realty Income has no effect on the direction of AG Mortgage i.e., AG Mortgage and Realty Income go up and down completely randomly.
Pair Corralation between AG Mortgage and Realty Income
Assuming the 90 days trading horizon AG Mortgage Investment is expected to generate 0.19 times more return on investment than Realty Income. However, AG Mortgage Investment is 5.37 times less risky than Realty Income. It trades about 0.26 of its potential returns per unit of risk. Realty Income is currently generating about -0.12 per unit of risk. If you would invest 2,514 in AG Mortgage Investment on August 30, 2024 and sell it today you would earn a total of 30.00 from holding AG Mortgage Investment or generate 1.19% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
AG Mortgage Investment vs. Realty Income
Performance |
| Timeline |
| AG Mortgage Investment |
| Realty Income |
AG Mortgage and Realty Income Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with AG Mortgage and Realty Income
The main advantage of trading using opposite AG Mortgage and Realty Income positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if AG Mortgage position performs unexpectedly, Realty Income 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 Realty Income will offset losses from the drop in Realty Income'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 |
| Realty Income vs. Federal Realty Investment | Realty Income vs. Macerich Company | Realty Income vs. National Retail Properties | Realty Income vs. Kimco Realty |
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 Economic Indicators module to top statistical indicators that provide insights into how an economy is performing.
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