Correlation Between Technology Telecommunicatio and AGNC Investment
Can any of the company-specific risk be diversified away by investing in both Technology Telecommunicatio 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 Technology Telecommunicatio and AGNC Investment into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Technology Telecommunication Acquisition and AGNC Investment Corp, you can compare the effects of market volatilities on Technology Telecommunicatio 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 Technology Telecommunicatio with a short position of AGNC Investment. Check out your portfolio center. Please also check ongoing floating volatility patterns of Technology Telecommunicatio and AGNC Investment.
Diversification Opportunities for Technology Telecommunicatio and AGNC Investment
-0.34 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Technology and AGNC is -0.34. Overlapping area represents the amount of risk that can be diversified away by holding Technology Telecommunication A 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 Technology Telecommunicatio 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 Technology Telecommunication Acquisition 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 Technology Telecommunicatio i.e., Technology Telecommunicatio and AGNC Investment go up and down completely randomly.
Pair Corralation between Technology Telecommunicatio and AGNC Investment
Assuming the 90 days horizon Technology Telecommunication Acquisition is expected to generate 96.35 times more return on investment than AGNC Investment. However, Technology Telecommunicatio is 96.35 times more volatile than AGNC Investment Corp. It trades about 0.07 of its potential returns per unit of risk. AGNC Investment Corp is currently generating about 0.12 per unit of risk. If you would invest 2.00 in Technology Telecommunication Acquisition on August 28, 2024 and sell it today you would lose (0.63) from holding Technology Telecommunication Acquisition or give up 31.5% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 61.9% |
| Values | Daily Returns |
Technology Telecommunication A vs. AGNC Investment Corp
Performance |
| Timeline |
| Technology Telecommunicatio |
| AGNC Investment Corp |
Technology Telecommunicatio and AGNC Investment Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Technology Telecommunicatio and AGNC Investment
The main advantage of trading using opposite Technology Telecommunicatio and AGNC Investment positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Technology Telecommunicatio 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.The idea behind Technology Telecommunication Acquisition and AGNC Investment Corp pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.
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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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