Correlation Between AGNC INVESTMENT and SILVER BULLET

Can any of the company-specific risk be diversified away by investing in both AGNC INVESTMENT and SILVER BULLET 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 AGNC INVESTMENT and SILVER BULLET into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between AGNC INVESTMENT and SILVER BULLET DATA, you can compare the effects of market volatilities on AGNC INVESTMENT and SILVER BULLET 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 AGNC INVESTMENT with a short position of SILVER BULLET. Check out your portfolio center. Please also check ongoing floating volatility patterns of AGNC INVESTMENT and SILVER BULLET.

Diversification Opportunities for AGNC INVESTMENT and SILVER BULLET

0.16

Correlation Coefficient

AGNC INVESTMENT  SILVER BULLET

Average diversification

The 3 months correlation between AGNC and SILVER is 0.16. Overlapping area represents the amount of risk that can be diversified away by holding AGNC INVESTMENT and SILVER BULLET DATA in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on SILVER BULLET DATA and AGNC INVESTMENT 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 AGNC INVESTMENT are associated (or correlated) with SILVER BULLET. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of SILVER BULLET DATA has no effect on the direction of AGNC INVESTMENT i.e., AGNC INVESTMENT and SILVER BULLET go up and down completely randomly.

Pair Corralation between AGNC INVESTMENT and SILVER BULLET

Assuming the 90 days trading horizon AGNC INVESTMENT is expected to generate 1.95 times less return on investment than SILVER BULLET. But when comparing it to its historical volatility, AGNC INVESTMENT is 2.2 times less risky than SILVER BULLET. It trades about 0.08 of its potential returns per unit of risk. SILVER BULLET DATA is currently generating about 0.07 of returns per unit of risk over similar time horizon. If you would invest  60.00  in SILVER BULLET DATA on October 25, 2024 and sell it today you would earn a total of  6.00  from holding SILVER BULLET DATA or generate 10.0% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Insignificant
Accuracy	100.0%
Values	Daily Returns

AGNC INVESTMENT  vs.  SILVER BULLET DATA

AGNC INVESTMENT

Risk-Adjusted Performance

6 of 100

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in AGNC INVESTMENT are ranked lower than 6 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively uncertain basic indicators, AGNC INVESTMENT may actually be approaching a critical reversion point that can send shares even higher in February 2025.

SILVER BULLET DATA

Risk-Adjusted Performance

5 of 100

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in SILVER BULLET DATA are ranked lower than 5 (%) of all global equities and portfolios over the last 90 days. Despite nearly fragile basic indicators, SILVER BULLET may actually be approaching a critical reversion point that can send shares even higher in February 2025.

Pair Trading with AGNC INVESTMENT and SILVER BULLET

The main advantage of trading using opposite AGNC INVESTMENT and SILVER BULLET positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if AGNC INVESTMENT position performs unexpectedly, SILVER BULLET 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 SILVER BULLET will offset losses from the drop in SILVER BULLET's long position.

The idea behind AGNC INVESTMENT and SILVER BULLET DATA 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.

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 Rebalancing module to analyze risk-adjusted returns against different time horizons to find asset-allocation targets.