Correlation Between Sunrise Realty and AGNC Investment

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

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

Diversification Opportunities for Sunrise Realty and AGNC Investment

0.46

Correlation Coefficient

Sunrise Realty  AGNC Investment

Very weak diversification

The 3 months correlation between Sunrise and AGNC is 0.46. Overlapping area represents the amount of risk that can be diversified away by holding Sunrise Realty Trust, 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 Sunrise Realty 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 Sunrise Realty Trust, 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 Sunrise Realty i.e., Sunrise Realty and AGNC Investment go up and down completely randomly.

Pair Corralation between Sunrise Realty and AGNC Investment

Given the investment horizon of 90 days Sunrise Realty Trust, is expected to generate 5.17 times more return on investment than AGNC Investment. However, Sunrise Realty is 5.17 times more volatile than AGNC Investment Corp. It trades about 0.04 of its potential returns per unit of risk. AGNC Investment Corp is currently generating about -0.01 per unit of risk. If you would invest  1,431  in Sunrise Realty Trust, on September 5, 2024 and sell it today you would earn a total of  23.00  from holding Sunrise Realty Trust, or generate 1.61% return on investment over 90 days.

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

Sunrise Realty Trust,  vs.  AGNC Investment Corp

Sunrise Realty Trust,

Risk-Adjusted Performance

4 of 100

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in Sunrise Realty Trust, are ranked lower than 4 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively unfluctuating basic indicators, Sunrise Realty may actually be approaching a critical reversion point that can send shares even higher in January 2025.

AGNC Investment Corp

Risk-Adjusted Performance

6 of 100

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in AGNC Investment Corp are ranked lower than 6 (%) 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 current stock price disarray, may contribute to short-term losses for the investors.

Pair Trading with Sunrise Realty and AGNC Investment

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

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 Bollinger Bands module to use Bollinger Bands indicator to analyze target price for a given investing horizon.