Correlation Between Transportadora and AG Mortgage
Can any of the company-specific risk be diversified away by investing in both Transportadora and AG Mortgage 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 Transportadora and AG Mortgage into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Transportadora de Gas and AG Mortgage Investment, you can compare the effects of market volatilities on Transportadora and AG Mortgage 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 Transportadora with a short position of AG Mortgage. Check out your portfolio center. Please also check ongoing floating volatility patterns of Transportadora and AG Mortgage.
Diversification Opportunities for Transportadora and AG Mortgage
0.73 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Transportadora and MITN is 0.73. Overlapping area represents the amount of risk that can be diversified away by holding Transportadora de Gas and AG Mortgage Investment in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on AG Mortgage Investment and Transportadora 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 Transportadora de Gas are associated (or correlated) with AG Mortgage. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of AG Mortgage Investment has no effect on the direction of Transportadora i.e., Transportadora and AG Mortgage go up and down completely randomly.
Pair Corralation between Transportadora and AG Mortgage
Considering the 90-day investment horizon Transportadora de Gas is expected to generate 17.74 times more return on investment than AG Mortgage. However, Transportadora is 17.74 times more volatile than AG Mortgage Investment. It trades about 0.08 of its potential returns per unit of risk. AG Mortgage Investment is currently generating about 0.28 per unit of risk. If you would invest 2,875 in Transportadora de Gas on October 25, 2024 and sell it today you would earn a total of 132.00 from holding Transportadora de Gas or generate 4.59% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Transportadora de Gas vs. AG Mortgage Investment
Performance |
| Timeline |
| Transportadora de Gas |
| AG Mortgage Investment |
Transportadora and AG Mortgage Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Transportadora and AG Mortgage
The main advantage of trading using opposite Transportadora and AG Mortgage positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Transportadora position performs unexpectedly, AG Mortgage 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 AG Mortgage will offset losses from the drop in AG Mortgage's long position.| Transportadora vs. Petroleo Brasileiro Petrobras | Transportadora vs. Ecopetrol SA ADR | Transportadora vs. Petrleo Brasileiro SA | Transportadora vs. Equinor ASA ADR |
| AG Mortgage vs. Aris Water Solutions | AG Mortgage vs. Transportadora de Gas | AG Mortgage vs. Tesla Inc | AG Mortgage vs. PACCAR Inc |
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 Anywhere module to track or share privately all of your investments from the convenience of any device.
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