Correlation Between GLOBUS MEDICAL-A and AGNC INVESTMENT

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

By analyzing existing cross correlation between GLOBUS MEDICAL A and AGNC INVESTMENT, you can compare the effects of market volatilities on GLOBUS MEDICAL-A 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 GLOBUS MEDICAL-A with a short position of AGNC INVESTMENT. Check out your portfolio center. Please also check ongoing floating volatility patterns of GLOBUS MEDICAL-A and AGNC INVESTMENT.

Diversification Opportunities for GLOBUS MEDICAL-A and AGNC INVESTMENT

0.1

Correlation Coefficient

GLOBUS MEDICAL-A  AGNC INVESTMENT

Average diversification

The 3 months correlation between GLOBUS and AGNC is 0.1. Overlapping area represents the amount of risk that can be diversified away by holding GLOBUS MEDICAL A and AGNC INVESTMENT in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on AGNC INVESTMENT and GLOBUS MEDICAL-A 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 GLOBUS MEDICAL A 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 GLOBUS MEDICAL-A i.e., GLOBUS MEDICAL-A and AGNC INVESTMENT go up and down completely randomly.

Pair Corralation between GLOBUS MEDICAL-A and AGNC INVESTMENT

Assuming the 90 days trading horizon GLOBUS MEDICAL-A is expected to generate 1.03 times less return on investment than AGNC INVESTMENT. In addition to that, GLOBUS MEDICAL-A is 1.52 times more volatile than AGNC INVESTMENT. It trades about 0.08 of its total potential returns per unit of risk. AGNC INVESTMENT is currently generating about 0.13 per unit of volatility. If you would invest  874.00  in AGNC INVESTMENT on October 9, 2024 and sell it today you would earn a total of  44.00  from holding AGNC INVESTMENT or generate 5.03% return on investment over 90 days.

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

GLOBUS MEDICAL A  vs.  AGNC INVESTMENT

GLOBUS MEDICAL A

Risk-Adjusted Performance

13 of 100

Good

Compared to the overall equity markets, risk-adjusted returns on investments in GLOBUS MEDICAL A are ranked lower than 13 (%) of all global equities and portfolios over the last 90 days. In spite of rather uncertain technical and fundamental indicators, GLOBUS MEDICAL-A exhibited solid returns over the last few months and may actually be approaching a breakup point.

AGNC INVESTMENT

Risk-Adjusted Performance

2 of 100

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in AGNC INVESTMENT are ranked lower than 2 (%) 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.

Pair Trading with GLOBUS MEDICAL-A and AGNC INVESTMENT

The main advantage of trading using opposite GLOBUS MEDICAL-A and AGNC INVESTMENT positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if GLOBUS MEDICAL-A 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 GLOBUS MEDICAL A and AGNC INVESTMENT 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 Performance Analysis module to check effects of mean-variance optimization against your current asset allocation.