Correlation Between AG Mortgage and LBTCOR

Can any of the company-specific risk be diversified away by investing in both AG Mortgage and LBTCOR 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 LBTCOR 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 LBTCOR 10875 15 JAN 31, you can compare the effects of market volatilities on AG Mortgage and LBTCOR 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 LBTCOR. Check out your portfolio center. Please also check ongoing floating volatility patterns of AG Mortgage and LBTCOR.

Diversification Opportunities for AG Mortgage and LBTCOR

0.46

Correlation Coefficient

AG Mortgage  LBTCOR

Very weak diversification

The 3 months correlation between MITP and LBTCOR is 0.46. Overlapping area represents the amount of risk that can be diversified away by holding AG Mortgage Investment and LBTCOR 10875 15 JAN 31 in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on LBTCOR 10875 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 LBTCOR. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of LBTCOR 10875 15 has no effect on the direction of AG Mortgage i.e., AG Mortgage and LBTCOR go up and down completely randomly.

Pair Corralation between AG Mortgage and LBTCOR

Given the investment horizon of 90 days AG Mortgage is expected to generate 1.93 times less return on investment than LBTCOR. But when comparing it to its historical volatility, AG Mortgage Investment is 2.99 times less risky than LBTCOR. It trades about 0.18 of its potential returns per unit of risk. LBTCOR 10875 15 JAN 31 is currently generating about 0.12 of returns per unit of risk over similar time horizon. If you would invest  10,700  in LBTCOR 10875 15 JAN 31 on December 21, 2024 and sell it today you would earn a total of  89.00  from holding LBTCOR 10875 15 JAN 31 or generate 0.83% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Weak
Accuracy	16.67%
Values	Daily Returns

AG Mortgage Investment  vs.  LBTCOR 10875 15 JAN 31

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 14 (%) of all global equities and portfolios over the last 90 days. Even with relatively invariable basic indicators, AG Mortgage is not utilizing all of its potentials. The current stock price agitation, may contribute to short-term losses for the retail investors.

LBTCOR 10875 15

Risk-Adjusted Performance

OK

Compared to the overall equity markets, risk-adjusted returns on investments in LBTCOR 10875 15 JAN 31 are ranked lower than 9 (%) of all global equities and portfolios over the last 90 days. Despite somewhat strong basic indicators, LBTCOR 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 LBTCOR

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

The idea behind AG Mortgage Investment and LBTCOR 10875 15 JAN 31 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 Balance Of Power module to check stock momentum by analyzing Balance Of Power indicator and other technical ratios.