Correlation Between Arlington Asset and AGNC Investment

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

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

Diversification Opportunities for Arlington Asset and AGNC Investment

0.0

Correlation Coefficient

Arlington Asset  AGNC Investment

Pay attention - limited upside

The 3 months correlation between Arlington and AGNC is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding Arlington Asset Investment 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 Arlington Asset 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 Arlington Asset Investment 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 Arlington Asset i.e., Arlington Asset and AGNC Investment go up and down completely randomly.

Pair Corralation between Arlington Asset and AGNC Investment

If you would invest  2,516  in AGNC Investment Corp on December 26, 2024 and sell it today you would earn a total of  103.00  from holding AGNC Investment Corp or generate 4.09% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Flat
Strength	Insignificant
Accuracy	0.0%
Values	Daily Returns

Arlington Asset Investment  vs.  AGNC Investment Corp

Arlington Asset Inve

Risk-Adjusted Performance

Very Weak

Over the last 90 days Arlington Asset Investment has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of rather sound forward indicators, Arlington Asset is not utilizing all of its potentials. The latest stock price tumult, may contribute to shorter-term losses for the shareholders.

AGNC Investment Corp

Risk-Adjusted Performance

Good

Compared to the overall equity markets, risk-adjusted returns on investments in AGNC Investment Corp are ranked lower than 14 (%) of all global equities and portfolios over the last 90 days. In spite of very healthy fundamental indicators, AGNC Investment is not utilizing all of its potentials. The recent stock price disarray, may contribute to short-term losses for the investors.

Pair Trading with Arlington Asset and AGNC Investment

The main advantage of trading using opposite Arlington Asset and AGNC Investment positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Arlington Asset 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.

The idea behind Arlington Asset Investment and AGNC Investment Corp 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.

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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 Optimization module to compute new portfolio that will generate highest expected return given your specified tolerance for risk.