Correlation Between Ecc Cap and AGNC Investment

Can any of the company-specific risk be diversified away by investing in both Ecc Cap 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 Ecc Cap and AGNC Investment into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between Ecc Cap Corp and AGNC Investment Corp, you can compare the effects of market volatilities on Ecc Cap 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 Ecc Cap with a short position of AGNC Investment. Check out your portfolio center. Please also check ongoing floating volatility patterns of Ecc Cap and AGNC Investment.

Diversification Opportunities for Ecc Cap and AGNC Investment

-0.4

Correlation Coefficient

Ecc Cap  AGNC Investment

Very good diversification

The 3 months correlation between Ecc and AGNC is -0.4. Overlapping area represents the amount of risk that can be diversified away by holding Ecc Cap Corp 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 Ecc Cap 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 Ecc Cap Corp 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 Ecc Cap i.e., Ecc Cap and AGNC Investment go up and down completely randomly.

Pair Corralation between Ecc Cap and AGNC Investment

If you would invest  2,457  in AGNC Investment Corp on September 2, 2024 and sell it today you would earn a total of  68.00  from holding AGNC Investment Corp or generate 2.77% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Very Weak
Accuracy	1.56%
Values	Daily Returns

Ecc Cap Corp  vs.  AGNC Investment Corp

Ecc Cap Corp

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Ecc Cap Corp has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of very healthy basic indicators, Ecc Cap is not utilizing all of its potentials. The latest stock price disarray, may contribute to short-term losses for the investors.

AGNC Investment Corp

Risk-Adjusted Performance

12 of 100

Good

Compared to the overall equity markets, risk-adjusted returns on investments in AGNC Investment Corp are ranked lower than 12 (%) of all global equities and portfolios over the last 90 days. In spite of very healthy fundamental indicators, AGNC Investment is not utilizing all of its potentials. The recent stock price disarray, may contribute to short-term losses for the investors.

Pair Trading with Ecc Cap and AGNC Investment

The main advantage of trading using opposite Ecc Cap and AGNC Investment positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Ecc Cap 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.

The idea behind Ecc Cap Corp and AGNC Investment Corp 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 Instant Ratings module to determine any equity ratings based on digital recommendations. Macroaxis instant equity ratings are based on combination of fundamental analysis and risk-adjusted market performance.