Correlation Between Addtech AB and AGNC INVESTMENT
Can any of the company-specific risk be diversified away by investing in both Addtech AB 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 Addtech AB and AGNC INVESTMENT into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Addtech AB and AGNC INVESTMENT, you can compare the effects of market volatilities on Addtech AB 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 Addtech AB with a short position of AGNC INVESTMENT. Check out your portfolio center. Please also check ongoing floating volatility patterns of Addtech AB and AGNC INVESTMENT.
Diversification Opportunities for Addtech AB and AGNC INVESTMENT
0.12 | Correlation Coefficient |
Average diversification
The 3 months correlation between Addtech and AGNC is 0.12. Overlapping area represents the amount of risk that can be diversified away by holding Addtech AB and AGNC INVESTMENT in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on AGNC INVESTMENT and Addtech AB 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 Addtech AB 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 has no effect on the direction of Addtech AB i.e., Addtech AB and AGNC INVESTMENT go up and down completely randomly.
Pair Corralation between Addtech AB and AGNC INVESTMENT
Assuming the 90 days trading horizon Addtech AB is expected to generate 1.5 times more return on investment than AGNC INVESTMENT. However, Addtech AB is 1.5 times more volatile than AGNC INVESTMENT. It trades about 0.02 of its potential returns per unit of risk. AGNC INVESTMENT is currently generating about 0.02 per unit of risk. If you would invest 2,610 in Addtech AB on October 21, 2024 and sell it today you would earn a total of 24.00 from holding Addtech AB or generate 0.92% return on investment over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Together |
Strength | Insignificant |
Accuracy | 100.0% |
Values | Daily Returns |
Addtech AB vs. AGNC INVESTMENT
Performance |
Timeline |
Addtech AB |
AGNC INVESTMENT |
Addtech AB and AGNC INVESTMENT Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with Addtech AB and AGNC INVESTMENT
The main advantage of trading using opposite Addtech AB and AGNC INVESTMENT positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Addtech AB 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.Addtech AB vs. GigaMedia | ||
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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 Global Markets Map module to get a quick overview of global market snapshot using zoomable world map. Drill down to check world indexes.
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