Correlation Between AGNC INVESTMENT and STRAITS TRADG

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

By analyzing existing cross correlation between AGNC INVESTMENT and STRAITS TRADG SD, you can compare the effects of market volatilities on AGNC INVESTMENT and STRAITS TRADG 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 STRAITS TRADG. Check out your portfolio center. Please also check ongoing floating volatility patterns of AGNC INVESTMENT and STRAITS TRADG.

Diversification Opportunities for AGNC INVESTMENT and STRAITS TRADG

0.35

Correlation Coefficient

AGNC INVESTMENT  STRAITS TRADG

Weak diversification

The 3 months correlation between AGNC and STRAITS is 0.35. Overlapping area represents the amount of risk that can be diversified away by holding AGNC INVESTMENT and STRAITS TRADG SD in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on STRAITS TRADG SD 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 STRAITS TRADG. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of STRAITS TRADG SD has no effect on the direction of AGNC INVESTMENT i.e., AGNC INVESTMENT and STRAITS TRADG go up and down completely randomly.

Pair Corralation between AGNC INVESTMENT and STRAITS TRADG

Assuming the 90 days trading horizon AGNC INVESTMENT is expected to generate 0.69 times more return on investment than STRAITS TRADG. However, AGNC INVESTMENT is 1.45 times less risky than STRAITS TRADG. It trades about 0.18 of its potential returns per unit of risk. STRAITS TRADG SD is currently generating about 0.06 per unit of risk. If you would invest  848.00  in AGNC INVESTMENT on October 7, 2024 and sell it today you would earn a total of  64.00  from holding AGNC INVESTMENT or generate 7.55% return on investment over 90 days.

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

AGNC INVESTMENT  vs.  STRAITS TRADG SD

AGNC INVESTMENT

Risk-Adjusted Performance

3 of 100

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in AGNC INVESTMENT are ranked lower than 3 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively stable basic indicators, AGNC INVESTMENT is not utilizing all of its potentials. The newest stock price uproar, may contribute to short-horizon losses for the private investors.

STRAITS TRADG SD

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days STRAITS TRADG SD has generated negative risk-adjusted returns adding no value to investors with long positions. Despite nearly stable basic indicators, STRAITS TRADG is not utilizing all of its potentials. The recent stock price disturbance, may contribute to mid-run losses for the stockholders.

Pair Trading with AGNC INVESTMENT and STRAITS TRADG

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

The idea behind AGNC INVESTMENT and STRAITS TRADG SD 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 Sync Your Broker module to sync your existing holdings, watchlists, positions or portfolios from thousands of online brokerage services, banks, investment account aggregators and robo-advisors..