Correlation Between Xp and AG Mortgage
Can any of the company-specific risk be diversified away by investing in both Xp and AG Mortgage 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 Xp and AG Mortgage into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Xp Inc and AG Mortgage Investment, you can compare the effects of market volatilities on Xp and AG Mortgage 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 Xp with a short position of AG Mortgage. Check out your portfolio center. Please also check ongoing floating volatility patterns of Xp and AG Mortgage.
Diversification Opportunities for Xp and AG Mortgage
0.74 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Xp and MITP is 0.74. Overlapping area represents the amount of risk that can be diversified away by holding Xp Inc and AG Mortgage Investment in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on AG Mortgage Investment and Xp 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 Xp Inc are associated (or correlated) with AG Mortgage. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of AG Mortgage Investment has no effect on the direction of Xp i.e., Xp and AG Mortgage go up and down completely randomly.
Pair Corralation between Xp and AG Mortgage
Allowing for the 90-day total investment horizon Xp Inc is expected to generate 10.34 times more return on investment than AG Mortgage. However, Xp is 10.34 times more volatile than AG Mortgage Investment. It trades about 0.1 of its potential returns per unit of risk. AG Mortgage Investment is currently generating about 0.1 per unit of risk. If you would invest 1,285 in Xp Inc on December 16, 2024 and sell it today you would earn a total of 182.00 from holding Xp Inc or generate 14.16% return on investment over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Together |
Strength | Significant |
Accuracy | 100.0% |
Values | Daily Returns |
Xp Inc vs. AG Mortgage Investment
Performance |
Timeline |
Xp Inc |
AG Mortgage Investment |
Xp and AG Mortgage Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with Xp and AG Mortgage
The main advantage of trading using opposite Xp and AG Mortgage positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Xp position performs unexpectedly, AG Mortgage 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 AG Mortgage will offset losses from the drop in AG Mortgage's long position.Xp vs. Up Fintech Holding | Xp vs. Bit Digital | Xp vs. Marathon Digital Holdings | Xp vs. MarketAxess Holdings |
AG Mortgage vs. Omni Health | AG Mortgage vs. Cedar Realty Trust | AG Mortgage vs. Spyre Therapeutics | AG Mortgage vs. MedX Health Corp |
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 Technical Analysis module to check basic technical indicators and analysis based on most latest market data.
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