Correlation Between AG Mortgage and Ventas
Can any of the company-specific risk be diversified away by investing in both AG Mortgage and Ventas 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 Ventas 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 Ventas Inc, you can compare the effects of market volatilities on AG Mortgage and Ventas 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 Ventas. Check out your portfolio center. Please also check ongoing floating volatility patterns of AG Mortgage and Ventas.
Diversification Opportunities for AG Mortgage and Ventas
0.75 | Correlation Coefficient |
Poor diversification
The 3 months correlation between MITT-PC and Ventas is 0.75. Overlapping area represents the amount of risk that can be diversified away by holding AG Mortgage Investment and Ventas Inc in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Ventas Inc 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 Ventas. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Ventas Inc has no effect on the direction of AG Mortgage i.e., AG Mortgage and Ventas go up and down completely randomly.
Pair Corralation between AG Mortgage and Ventas
Assuming the 90 days trading horizon AG Mortgage Investment is expected to generate 0.59 times more return on investment than Ventas. However, AG Mortgage Investment is 1.71 times less risky than Ventas. It trades about 0.13 of its potential returns per unit of risk. Ventas Inc is currently generating about 0.06 per unit of risk. If you would invest 1,445 in AG Mortgage Investment on August 27, 2024 and sell it today you would earn a total of 1,083 from holding AG Mortgage Investment or generate 74.95% 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. Ventas Inc
Performance |
| Timeline |
| AG Mortgage Investment |
| Ventas Inc |
AG Mortgage and Ventas Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with AG Mortgage and Ventas
The main advantage of trading using opposite AG Mortgage and Ventas positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if AG Mortgage position performs unexpectedly, Ventas 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 Ventas will offset losses from the drop in Ventas' 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 |
| Ventas vs. Healthcare Realty Trust | Ventas vs. Healthpeak Properties | Ventas vs. Universal Health Realty | Ventas vs. Global Medical REIT |
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 ETF Categories module to list of ETF categories grouped based on various criteria, such as the investment strategy or type of investments.
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