Correlation Between NYSE Composite and AGNC Investment
Can any of the company-specific risk be diversified away by investing in both NYSE Composite and AGNC Investment 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 NYSE Composite and AGNC Investment into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between NYSE Composite and AGNC Investment Corp, you can compare the effects of market volatilities on NYSE Composite and AGNC Investment 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 NYSE Composite with a short position of AGNC Investment. Check out your portfolio center. Please also check ongoing floating volatility patterns of NYSE Composite and AGNC Investment.
Diversification Opportunities for NYSE Composite and AGNC Investment
0.63 | Correlation Coefficient |
Poor diversification
The 3 months correlation between NYSE and AGNC is 0.63. Overlapping area represents the amount of risk that can be diversified away by holding NYSE Composite and AGNC Investment Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on AGNC Investment Corp and NYSE Composite 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 NYSE Composite are associated (or correlated) with AGNC Investment. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of AGNC Investment Corp has no effect on the direction of NYSE Composite i.e., NYSE Composite and AGNC Investment go up and down completely randomly.
Pair Corralation between NYSE Composite and AGNC Investment
Assuming the 90 days trading horizon NYSE Composite is expected to generate 1.52 times more return on investment than AGNC Investment. However, NYSE Composite is 1.52 times more volatile than AGNC Investment Corp. It trades about 0.29 of its potential returns per unit of risk. AGNC Investment Corp is currently generating about 0.0 per unit of risk. If you would invest 1,941,627 in NYSE Composite on August 31, 2024 and sell it today you would earn a total of 79,355 from holding NYSE Composite or generate 4.09% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
NYSE Composite vs. AGNC Investment Corp
Performance |
| Timeline |
NYSE Composite and AGNC Investment Volatility Contrast
Predicted Return Density |
| Returns |
NYSE Composite
Pair trading matchups for NYSE Composite
AGNC Investment Corp
Pair trading matchups for AGNC Investment
Pair Trading with NYSE Composite and AGNC Investment
The main advantage of trading using opposite NYSE Composite and AGNC Investment positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if NYSE Composite position performs unexpectedly, AGNC Investment 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 AGNC Investment will offset losses from the drop in AGNC Investment's long position.| NYSE Composite vs. Nextplat Corp | NYSE Composite vs. Qualys Inc | NYSE Composite vs. Cadence Design Systems | NYSE Composite vs. Asure Software |
| AGNC Investment vs. Annaly Capital Management | AGNC Investment vs. Annaly Capital Management | AGNC Investment vs. AGNC Investment Corp | AGNC Investment vs. New York 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 Equity Forecasting module to use basic forecasting models to generate price predictions and determine price momentum.
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