Correlation Between AG Mortgage and Msif Us

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

Diversification Opportunities for AG Mortgage and Msif Us

0.73

Correlation Coefficient

AG Mortgage  Msif Us

Poor diversification

The 3 months correlation between MITT-PC and Msif is 0.73. Overlapping area represents the amount of risk that can be diversified away by holding AG Mortgage Investment and Msif Real Estate in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Msif Real Estate 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 Msif Us. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Msif Real Estate has no effect on the direction of AG Mortgage i.e., AG Mortgage and Msif Us go up and down completely randomly.

Pair Corralation between AG Mortgage and Msif Us

Assuming the 90 days trading horizon AG Mortgage is expected to generate 2.5 times less return on investment than Msif Us. But when comparing it to its historical volatility, AG Mortgage Investment is 1.74 times less risky than Msif Us. It trades about 0.07 of its potential returns per unit of risk. Msif Real Estate is currently generating about 0.11 of returns per unit of risk over similar time horizon. If you would invest  988.00  in Msif Real Estate on September 2, 2024 and sell it today you would earn a total of  38.00  from holding Msif Real Estate or generate 3.85% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Significant
Accuracy	93.75%
Values	Daily Returns

AG Mortgage Investment  vs.  Msif Real Estate

AG Mortgage Investment

Risk-Adjusted Performance

5 of 100

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in AG Mortgage Investment are ranked lower than 5 (%) 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 latest stock price tumult, may contribute to shorter-term losses for the shareholders.

Msif Real Estate

Risk-Adjusted Performance

8 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Msif Real Estate are ranked lower than 8 (%) of all funds and portfolios of funds over the last 90 days. In spite of fairly strong basic indicators, Msif Us is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

Pair Trading with AG Mortgage and Msif Us

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

The idea behind AG Mortgage Investment and Msif Real Estate 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 USA ETFs module to find actively traded Exchange Traded Funds (ETF) in USA.