Correlation Between Visa and AGNC Investment
Can any of the company-specific risk be diversified away by investing in both Visa 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 Visa and AGNC Investment into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Visa Class A and AGNC Investment Corp, you can compare the effects of market volatilities on Visa 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 Visa with a short position of AGNC Investment. Check out your portfolio center. Please also check ongoing floating volatility patterns of Visa and AGNC Investment.
Diversification Opportunities for Visa and AGNC Investment
-0.48 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Visa and AGNC is -0.48. Overlapping area represents the amount of risk that can be diversified away by holding Visa Class 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 Visa 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 Visa Class A 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 Visa i.e., Visa and AGNC Investment go up and down completely randomly.
Pair Corralation between Visa and AGNC Investment
Taking into account the 90-day investment horizon Visa Class A is expected to generate 1.25 times more return on investment than AGNC Investment. However, Visa is 1.25 times more volatile than AGNC Investment Corp. It trades about 0.33 of its potential returns per unit of risk. AGNC Investment Corp is currently generating about 0.11 per unit of risk. If you would invest 28,365 in Visa Class A on August 27, 2024 and sell it today you would earn a total of 2,627 from holding Visa Class A or generate 9.26% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Visa Class A vs. AGNC Investment Corp
Performance |
| Timeline |
| Visa Class A |
| AGNC Investment Corp |
Visa and AGNC Investment Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Visa and AGNC Investment
The main advantage of trading using opposite Visa and AGNC Investment positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Visa 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.| Visa vs. American Express | Visa vs. Morningstar Unconstrained Allocation | Visa vs. Sitka Gold Corp | Visa vs. MSCI ACWI exAUCONSUMER |
| AGNC Investment vs. Two Harbors Investments | AGNC Investment vs. Chimera Investment | AGNC Investment vs. ARMOUR Residential REIT | AGNC Investment vs. Arbor Realty Trust |
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 Stocks Directory module to find actively traded stocks across global markets.
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