Correlation Between AGNC Investment and BOS Better

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

By analyzing existing cross correlation between AGNC Investment Corp and BOS Better Online, you can compare the effects of market volatilities on AGNC Investment and BOS Better 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 BOS Better. Check out your portfolio center. Please also check ongoing floating volatility patterns of AGNC Investment and BOS Better.

Diversification Opportunities for AGNC Investment and BOS Better

-0.36

Correlation Coefficient

AGNC Investment  BOS Better

Very good diversification

The 3 months correlation between AGNC and BOS is -0.36. Overlapping area represents the amount of risk that can be diversified away by holding AGNC Investment Corp and BOS Better Online in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on BOS Better Online 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 Corp are associated (or correlated) with BOS Better. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of BOS Better Online has no effect on the direction of AGNC Investment i.e., AGNC Investment and BOS Better go up and down completely randomly.

Pair Corralation between AGNC Investment and BOS Better

Given the investment horizon of 90 days AGNC Investment Corp is expected to under-perform the BOS Better. But the stock apears to be less risky and, when comparing its historical volatility, AGNC Investment Corp is 2.93 times less risky than BOS Better. The stock trades about -0.05 of its potential returns per unit of risk. The BOS Better Online is currently generating about 0.17 of returns per unit of risk over similar time horizon. If you would invest  338.00  in BOS Better Online on October 8, 2024 and sell it today you would earn a total of  33.00  from holding BOS Better Online or generate 9.76% return on investment over 90 days.

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

AGNC Investment Corp  vs.  BOS Better Online

AGNC Investment Corp

Risk-Adjusted Performance

0 of 100

Very Weak

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

BOS Better Online

Risk-Adjusted Performance

16 of 100

Good

Compared to the overall equity markets, risk-adjusted returns on investments in BOS Better Online are ranked lower than 16 (%) of all global equities and portfolios over the last 90 days. In spite of rather weak basic indicators, BOS Better exhibited solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with AGNC Investment and BOS Better

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

The idea behind AGNC Investment Corp and BOS Better Online 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 Crypto Correlations module to use cryptocurrency correlation module to diversify your cryptocurrency portfolio across multiple coins.