Correlation Between AG Mortgage and Ivy Advantus

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

Diversification Opportunities for AG Mortgage and Ivy Advantus

-0.34

Correlation Coefficient

AG Mortgage  Ivy Advantus

Very good diversification

The 3 months correlation between MITT-PC and Ivy is -0.34. Overlapping area represents the amount of risk that can be diversified away by holding AG Mortgage Investment and Ivy Advantus Real in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Ivy Advantus Real 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 Ivy Advantus. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Ivy Advantus Real has no effect on the direction of AG Mortgage i.e., AG Mortgage and Ivy Advantus go up and down completely randomly.

Pair Corralation between AG Mortgage and Ivy Advantus

Assuming the 90 days trading horizon AG Mortgage Investment is expected to generate 0.43 times more return on investment than Ivy Advantus. However, AG Mortgage Investment is 2.3 times less risky than Ivy Advantus. It trades about 0.26 of its potential returns per unit of risk. Ivy Advantus Real is currently generating about 0.04 per unit of risk. If you would invest  1,679  in AG Mortgage Investment on September 24, 2024 and sell it today you would earn a total of  820.00  from holding AG Mortgage Investment or generate 48.84% return on investment over 90 days.

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

AG Mortgage Investment  vs.  Ivy Advantus Real

AG Mortgage Investment

Risk-Adjusted Performance

17 of 100

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in AG Mortgage Investment are ranked lower than 17 (%) of all global equities and portfolios over the last 90 days. In spite of rather sound fundamental indicators, AG Mortgage is not utilizing all of its potentials. The current stock price tumult, may contribute to shorter-term losses for the shareholders.

Ivy Advantus Real

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Ivy Advantus Real has generated negative risk-adjusted returns adding no value to fund investors. In spite of unfluctuating performance in the last few months, the Fund's technical and fundamental indicators remain fairly strong which may send shares a bit higher in January 2025. The current disturbance may also be a sign of long term up-swing for the fund investors.

Pair Trading with AG Mortgage and Ivy Advantus

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

The idea behind AG Mortgage Investment and Ivy Advantus Real 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.

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 Portfolio Rebalancing module to analyze risk-adjusted returns against different time horizons to find asset-allocation targets.