Correlation Between FirstEnergy and AGNC Investment
Can any of the company-specific risk be diversified away by investing in both FirstEnergy 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 FirstEnergy and AGNC Investment into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between FirstEnergy and AGNC Investment Corp, you can compare the effects of market volatilities on FirstEnergy 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 FirstEnergy with a short position of AGNC Investment. Check out your portfolio center. Please also check ongoing floating volatility patterns of FirstEnergy and AGNC Investment.
Diversification Opportunities for FirstEnergy and AGNC Investment
0.66 | Correlation Coefficient |
Poor diversification
The 3 months correlation between FirstEnergy and AGNC is 0.66. Overlapping area represents the amount of risk that can be diversified away by holding FirstEnergy 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 FirstEnergy 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 FirstEnergy 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 FirstEnergy i.e., FirstEnergy and AGNC Investment go up and down completely randomly.
Pair Corralation between FirstEnergy and AGNC Investment
Allowing for the 90-day total investment horizon FirstEnergy is expected to generate 2.57 times less return on investment than AGNC Investment. But when comparing it to its historical volatility, FirstEnergy is 1.63 times less risky than AGNC Investment. It trades about 0.05 of its potential returns per unit of risk. AGNC Investment Corp is currently generating about 0.09 of returns per unit of risk over similar time horizon. If you would invest 762.00 in AGNC Investment Corp on January 17, 2024 and sell it today you would earn a total of 151.00 from holding AGNC Investment Corp or generate 19.82% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
FirstEnergy vs. AGNC Investment Corp
Performance |
| Timeline |
| FirstEnergy |
| AGNC Investment Corp |
FirstEnergy and AGNC Investment Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with FirstEnergy and AGNC Investment
The main advantage of trading using opposite FirstEnergy and AGNC Investment positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if FirstEnergy 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.| FirstEnergy vs. Centrais Eltricas Brasileiras | FirstEnergy vs. Central Puerto SA | FirstEnergy vs. CMS Energy | FirstEnergy vs. Centrais Electricas Brasileiras |
| AGNC Investment vs. Two Harbors Investments | AGNC Investment vs. Chimera Investment | AGNC Investment vs. ARMOUR Residential REIT | AGNC Investment vs. Arbor Realty Trust |
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 Portfolio Manager module to state of the art Portfolio Manager to monitor and improve performance of your invested capital.
Other Complementary Tools
| Fundamentals Comparison Compare fundamentals across multiple equities to find investing opportunities | |
| FinTech Suite Use AI to screen and filter profitable investment opportunities | |
| Efficient Frontier Plot and analyze your portfolio and positions against risk-return landscape of the market. | |
| Commodity Channel Use Commodity Channel Index to analyze current equity momentum | |
| Crypto Correlations Use cryptocurrency correlation module to diversify your cryptocurrency portfolio across multiple coins | |
| Stock Screener Find equities using a custom stock filter or screen asymmetry in trading patterns, price, volume, or investment outlook. | |
| My Watchlist Analysis Analyze my current watchlist and to refresh optimization strategy. Macroaxis watchlist is based on self-learning algorithm to remember stocks you like |