Correlation Between Apollo Commercial and AGNC Investment
Can any of the company-specific risk be diversified away by investing in both Apollo Commercial 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 Apollo Commercial and AGNC Investment into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Apollo Commercial Real and AGNC Investment Corp, you can compare the effects of market volatilities on Apollo Commercial 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 Apollo Commercial with a short position of AGNC Investment. Check out your portfolio center. Please also check ongoing floating volatility patterns of Apollo Commercial and AGNC Investment.
Diversification Opportunities for Apollo Commercial and AGNC Investment
0.47 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Apollo and AGNC is 0.47. Overlapping area represents the amount of risk that can be diversified away by holding Apollo Commercial Real 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 Apollo Commercial 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 Apollo Commercial Real 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 Apollo Commercial i.e., Apollo Commercial and AGNC Investment go up and down completely randomly.
Pair Corralation between Apollo Commercial and AGNC Investment
Considering the 90-day investment horizon Apollo Commercial Real is expected to generate 2.2 times more return on investment than AGNC Investment. However, Apollo Commercial is 2.2 times more volatile than AGNC Investment Corp. It trades about 0.11 of its potential returns per unit of risk. AGNC Investment Corp is currently generating about 0.04 per unit of risk. If you would invest 903.00 in Apollo Commercial Real on December 2, 2024 and sell it today you would earn a total of 110.00 from holding Apollo Commercial Real or generate 12.18% return on investment over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Together |
Strength | Weak |
Accuracy | 100.0% |
Values | Daily Returns |
Apollo Commercial Real vs. AGNC Investment Corp
Performance |
Timeline |
Apollo Commercial Real |
AGNC Investment Corp |
Apollo Commercial and AGNC Investment Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with Apollo Commercial and AGNC Investment
The main advantage of trading using opposite Apollo Commercial and AGNC Investment positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Apollo Commercial 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.Apollo Commercial vs. Ares Commercial Real | Apollo Commercial vs. PennyMac Mortgage Investment | Apollo Commercial vs. Blackstone Mortgage Trust | Apollo Commercial vs. Starwood Property Trust |
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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 FinTech Suite module to use AI to screen and filter profitable investment opportunities.
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