Correlation Between AGNC Investment and American Campus

Specify exactly 2 symbols:
Can any of the company-specific risk be diversified away by investing in both AGNC Investment and American Campus 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 American Campus 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 American Campus Communities, you can compare the effects of market volatilities on AGNC Investment and American Campus 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 American Campus. Check out your portfolio center. Please also check ongoing floating volatility patterns of AGNC Investment and American Campus.

Diversification Opportunities for AGNC Investment and American Campus

0.57
  Correlation Coefficient

Very weak diversification

The 3 months correlation between AGNC and American is 0.57. Overlapping area represents the amount of risk that can be diversified away by holding AGNC Investment Corp and American Campus Communities in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on American Campus Comm 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 American Campus. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of American Campus Comm has no effect on the direction of AGNC Investment i.e., AGNC Investment and American Campus go up and down completely randomly.

Pair Corralation between AGNC Investment and American Campus

Given the investment horizon of 90 days AGNC Investment is expected to generate 5.24 times less return on investment than American Campus. In addition to that, AGNC Investment is 1.49 times more volatile than American Campus Communities. It trades about 0.02 of its total potential returns per unit of risk. American Campus Communities is currently generating about 0.12 per unit of volatility. If you would invest  5,698  in American Campus Communities on December 30, 2023 and sell it today you would earn a total of  844.00  from holding American Campus Communities or generate 14.81% return on investment over 90 days.
Time Period3 Months [change]
DirectionMoves Together 
StrengthWeak
Accuracy17.0%
ValuesDaily Returns

AGNC Investment Corp  vs.  American Campus Communities

 Performance 
       Timeline  
AGNC Investment Corp 

Risk-Adjusted Performance

6 of 100

 
Low
 
High
Insignificant
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 rather uncertain basic indicators, AGNC Investment may actually be approaching a critical reversion point that can send shares even higher in April 2024.
American Campus Comm 

Risk-Adjusted Performance

0 of 100

 
Low
 
High
Very Weak
Over the last 90 days American Campus Communities has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of rather sound fundamental indicators, American Campus is not utilizing all of its potentials. The recent stock price tumult, may contribute to shorter-term losses for the shareholders.

AGNC Investment and American Campus Volatility Contrast

   Predicted Return Density   
       Returns  

Pair Trading with AGNC Investment and American Campus

The main advantage of trading using opposite AGNC Investment and American Campus positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if AGNC Investment position performs unexpectedly, American Campus 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 American Campus will offset losses from the drop in American Campus' long position.
The idea behind AGNC Investment Corp and American Campus Communities 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 Financial Widgets module to easily integrated Macroaxis content with over 30 different plug-and-play financial widgets.

Other Complementary Tools

Portfolio Backtesting
Avoid under-diversification and over-optimization by backtesting your portfolios
Transaction History
View history of all your transactions and understand their impact on performance
Fundamental Analysis
View fundamental data based on most recent published financial statements
Price Exposure Probability
Analyze equity upside and downside potential for a given time horizon across multiple markets
Portfolio Manager
State of the art Portfolio Manager to monitor and improve performance of your invested capital
Options Analysis
Analyze and evaluate options and option chains as a potential hedge for your portfolios
Bonds Directory
Find actively traded corporate debentures issued by US companies
Stocks Directory
Find actively traded stocks across global markets