Correlation Between AgJunction and AGNC Investment
Can any of the company-specific risk be diversified away by investing in both AgJunction 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 AgJunction and AGNC Investment into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between AgJunction and AGNC Investment Corp, you can compare the effects of market volatilities on AgJunction 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 AgJunction with a short position of AGNC Investment. Check out your portfolio center. Please also check ongoing floating volatility patterns of AgJunction and AGNC Investment.
Diversification Opportunities for AgJunction and AGNC Investment
-0.3 | Correlation Coefficient |
Very good diversification
The 3 months correlation between AgJunction and AGNC is -0.3. Overlapping area represents the amount of risk that can be diversified away by holding AgJunction and AGNC Investment Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on AGNC Investment Corp and AgJunction 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 AgJunction 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 Corp has no effect on the direction of AgJunction i.e., AgJunction and AGNC Investment go up and down completely randomly.
Pair Corralation between AgJunction and AGNC Investment
Considering the 90-day investment horizon AgJunction is expected to generate 819.25 times more return on investment than AGNC Investment. However, AgJunction is 819.25 times more volatile than AGNC Investment Corp. It trades about 0.22 of its potential returns per unit of risk. AGNC Investment Corp is currently generating about -0.03 per unit of risk. If you would invest 301.00 in AgJunction on September 13, 2024 and sell it today you would lose (1.00) from holding AgJunction or give up 0.33% of portfolio value over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Against |
Strength | Insignificant |
Accuracy | 76.19% |
Values | Daily Returns |
AgJunction vs. AGNC Investment Corp
Performance |
Timeline |
AgJunction |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
OK
AGNC Investment Corp |
AgJunction and AGNC Investment Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with AgJunction and AGNC Investment
The main advantage of trading using opposite AgJunction and AGNC Investment positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if AgJunction 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.AgJunction vs. Ellington Financial | AgJunction vs. Dynex Capital | AgJunction vs. Ares Commercial Real | AgJunction vs. Cherry Hill Mortgage |
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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 File Import module to quickly import all of your third-party portfolios from your local drive in csv format.
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