Correlation Between AG Mortgage and 26442UAQ7

Can any of the company-specific risk be diversified away by investing in both AG Mortgage and 26442UAQ7 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 AG Mortgage and 26442UAQ7 into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between AG Mortgage Investment and DUK 525 15 MAR 33, you can compare the effects of market volatilities on AG Mortgage and 26442UAQ7 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 AG Mortgage with a short position of 26442UAQ7. Check out your portfolio center. Please also check ongoing floating volatility patterns of AG Mortgage and 26442UAQ7.

Diversification Opportunities for AG Mortgage and 26442UAQ7

0.35

Correlation Coefficient

AG Mortgage  26442UAQ7

Weak diversification

The 3 months correlation between MITN and 26442UAQ7 is 0.35. Overlapping area represents the amount of risk that can be diversified away by holding AG Mortgage Investment and DUK 525 15 MAR 33 in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on DUK 525 15 and AG Mortgage 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 AG Mortgage Investment are associated (or correlated) with 26442UAQ7. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of DUK 525 15 has no effect on the direction of AG Mortgage i.e., AG Mortgage and 26442UAQ7 go up and down completely randomly.

Pair Corralation between AG Mortgage and 26442UAQ7

Given the investment horizon of 90 days AG Mortgage Investment is expected to generate 0.36 times more return on investment than 26442UAQ7. However, AG Mortgage Investment is 2.74 times less risky than 26442UAQ7. It trades about 0.2 of its potential returns per unit of risk. DUK 525 15 MAR 33 is currently generating about 0.05 per unit of risk. If you would invest  2,454  in AG Mortgage Investment on December 23, 2024 and sell it today you would earn a total of  61.00  from holding AG Mortgage Investment or generate 2.49% return on investment over 90 days.

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

AG Mortgage Investment  vs.  DUK 525 15 MAR 33

AG Mortgage Investment

Risk-Adjusted Performance

Good

Compared to the overall equity markets, risk-adjusted returns on investments in AG Mortgage Investment are ranked lower than 15 (%) of all global equities and portfolios over the last 90 days. In spite of very healthy basic indicators, AG Mortgage is not utilizing all of its potentials. The latest stock price disarray, may contribute to short-term losses for the investors.

DUK 525 15

Risk-Adjusted Performance

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in DUK 525 15 MAR 33 are ranked lower than 3 (%) of all global equities and portfolios over the last 90 days. Despite somewhat strong basic indicators, 26442UAQ7 is not utilizing all of its potentials. The latest stock price disturbance, may contribute to short-term losses for the investors.

Pair Trading with AG Mortgage and 26442UAQ7

The main advantage of trading using opposite AG Mortgage and 26442UAQ7 positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if AG Mortgage position performs unexpectedly, 26442UAQ7 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 26442UAQ7 will offset losses from the drop in 26442UAQ7's long position.

The idea behind AG Mortgage Investment and DUK 525 15 MAR 33 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 Fundamentals Comparison module to compare fundamentals across multiple equities to find investing opportunities.