Correlation Between Agnc Investment and Equity Residential

Specify exactly 2 symbols:
Can any of the company-specific risk be diversified away by investing in both Agnc Investment and Equity Residential 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 Agnc Investment and Equity Residential into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Agnc Investment Corp and Equity Residential, you can compare the effects of market volatilities on Agnc Investment and Equity Residential 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 Agnc Investment with a short position of Equity Residential. Check out your portfolio center. Please also check ongoing floating volatility patterns of Agnc Investment and Equity Residential.

Diversification Opportunities for Agnc Investment and Equity Residential

0.85
  Correlation Coefficient

Very poor diversification

The 3 months correlation between Agnc Investment and Equity is 0.85. Overlapping area represents the amount of risk that can be diversified away by holding Agnc Investment Corp and Equity Residential in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Equity Residential and Agnc Investment 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 Agnc Investment Corp are associated (or correlated) with Equity Residential. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Equity Residential has no effect on the direction of Agnc Investment i.e., Agnc Investment and Equity Residential go up and down completely randomly.

Pair Corralation between Agnc Investment and Equity Residential

Given the investment horizon of 90 days Agnc Investment Corp is expected to under-perform the Equity Residential. But the stock apears to be less risky and, when comparing its historical volatility, Agnc Investment Corp is 1.23 times less risky than Equity Residential. The stock trades about -0.03 of its potential returns per unit of risk. The Equity Residential is currently generating about 0.04 of returns per unit of risk over similar time horizon. If you would invest  5,340  in Equity Residential on June 27, 2022 and sell it today you would earn a total of  1,499  from holding Equity Residential or generate 28.07% return on investment over 90 days.
Time Period3 Months [change]
DirectionMoves Together 
StrengthStrong
Accuracy100.0%
ValuesDaily Returns

Agnc Investment Corp  vs.  Equity Residential

 Performance (%) 
       Timeline  
Agnc Investment Corp 
Agnc Investment Performance
0 of 100
Over the last 90 days Agnc Investment Corp has generated negative risk-adjusted returns adding no value to investors with long positions. Despite latest weak performance, the Stock's basic indicators remain strong and the current disturbance on Wall Street may also be a sign of long term gains for the company investors.

Agnc Investment Price Channel

Equity Residential 
Equity Performance
0 of 100
Over the last 90 days Equity Residential has generated negative risk-adjusted returns adding no value to investors with long positions. Even with relatively invariable basic indicators, Equity Residential is not utilizing all of its potentials. The current stock price agitation, may contribute to short-term losses for the retail investors.

Equity Price Channel

Agnc Investment and Equity Residential Volatility Contrast

   Predicted Return Density   
       Returns  

Pair Trading with Agnc Investment and Equity Residential

The main advantage of trading using opposite Agnc Investment and Equity Residential positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Agnc Investment position performs unexpectedly, Equity Residential 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 Equity Residential will offset losses from the drop in Equity Residential's long position.
Agnc Investment vs. Randstad Holdings NV
Agnc Investment vs. Trinet Group
Agnc Investment vs. Recruit Holdings CoLtd
Agnc Investment vs. Technopro Holdings
The idea behind Agnc Investment Corp and Equity Residential 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.
Equity Residential vs. Industrias Bachoco SA
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 Premium Stories module to follow Macroaxis premium stories from verified contributors across different equity types, categories and coverage scope.

Other Complementary Tools

Piotroski F Score
Get Piotroski F Score based on binary analysis strategy of nine different fundamentals
Go
Financial Widgets
Easily integrated Macroaxis content with over 30 different plug-and-play financial widgets
Go
Portfolio Center
All portfolio management and optimization tools to improve performance of your portfolios
Go
Watchlist Optimization
Optimize watchlists to build efficient portfolio or rebalance existing positions based on mean-variance optimization algorithm
Go
Global Markets Map
Get a quick overview of global market snapshot using zoomable world map. Drill down to check world indexes
Go
Financial Widgets
Easily integrated Macroaxis content with over 30 different plug-and-play financial widgets
Go
Bond Analysis
Evaluate and analyze corporate bonds as a potential investment for your portfolios.
Go
Volatility Analysis
Get historical volatility and risk analysis based on latest market data
Go
Bond Directory
Find actively traded corporate debentures issued by US companies
Go