Correlation Between Fiserv and AGNC Investment
Can any of the company-specific risk be diversified away by investing in both Fiserv 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 Fiserv and AGNC Investment into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Fiserv Inc and AGNC Investment Corp, you can compare the effects of market volatilities on Fiserv 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 Fiserv with a short position of AGNC Investment. Check out your portfolio center. Please also check ongoing floating volatility patterns of Fiserv and AGNC Investment.
Diversification Opportunities for Fiserv and AGNC Investment
0.66 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Fiserv and AGNC is 0.66. Overlapping area represents the amount of risk that can be diversified away by holding Fiserv Inc 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 Fiserv 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 Fiserv Inc 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 Fiserv i.e., Fiserv and AGNC Investment go up and down completely randomly.
Pair Corralation between Fiserv and AGNC Investment
Given the investment horizon of 90 days Fiserv is expected to generate 2.03 times less return on investment than AGNC Investment. But when comparing it to its historical volatility, Fiserv Inc is 1.13 times less risky than AGNC Investment. It trades about 0.0 of its potential returns per unit of risk. AGNC Investment Corp is currently generating about 0.01 of returns per unit of risk over similar time horizon. If you would invest 923.00 in AGNC Investment Corp on January 21, 2024 and sell it today you would lose (8.00) from holding AGNC Investment Corp or give up 0.87% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 24.48% |
| Values | Daily Returns |
Fiserv Inc vs. AGNC Investment Corp
Performance |
| Timeline |
| Fiserv Inc |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
| AGNC Investment Corp |
Fiserv and AGNC Investment Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Fiserv and AGNC Investment
The main advantage of trading using opposite Fiserv and AGNC Investment positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Fiserv 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.| Fiserv vs. Jack Henry Associates | Fiserv vs. Cognizant Technology Solutions | Fiserv vs. CDW Corp | Fiserv vs. Broadridge Financial Solutions |
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 Latest Portfolios module to quick portfolio dashboard that showcases your latest portfolios.
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