Correlation Between WisdomTree and AGNC Investment
Can any of the company-specific risk be diversified away by investing in both WisdomTree 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 WisdomTree and AGNC Investment into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between WisdomTree and AGNC Investment Corp, you can compare the effects of market volatilities on WisdomTree 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 WisdomTree with a short position of AGNC Investment. Check out your portfolio center. Please also check ongoing floating volatility patterns of WisdomTree and AGNC Investment.
Diversification Opportunities for WisdomTree and AGNC Investment
-0.53 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between WisdomTree and AGNC is -0.53. Overlapping area represents the amount of risk that can be diversified away by holding WisdomTree 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 WisdomTree 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 WisdomTree 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 WisdomTree i.e., WisdomTree and AGNC Investment go up and down completely randomly.
Pair Corralation between WisdomTree and AGNC Investment
Allowing for the 90-day total investment horizon WisdomTree is expected to generate 1.9 times more return on investment than AGNC Investment. However, WisdomTree is 1.9 times more volatile than AGNC Investment Corp. It trades about 0.35 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 1,041 in WisdomTree on August 27, 2024 and sell it today you would earn a total of 159.00 from holding WisdomTree or generate 15.27% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
WisdomTree vs. AGNC Investment Corp
Performance |
| Timeline |
| WisdomTree |
| AGNC Investment Corp |
WisdomTree and AGNC Investment Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with WisdomTree and AGNC Investment
The main advantage of trading using opposite WisdomTree and AGNC Investment positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if WisdomTree 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.| WisdomTree vs. PowerUp Acquisition Corp | WisdomTree vs. Aurora Innovation | WisdomTree vs. HUMANA INC | WisdomTree vs. Aquagold International |
| AGNC Investment vs. Blackstone Mortgage Trust | AGNC Investment vs. Omega Healthcare Investors | AGNC Investment vs. Medical Properties 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 Money Flow Index module to determine momentum by analyzing Money Flow Index and other technical indicators.
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