Correlation Between Sanofi ADR and AGNC Investment
Can any of the company-specific risk be diversified away by investing in both Sanofi ADR 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 Sanofi ADR and AGNC Investment into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Sanofi ADR and AGNC Investment Corp, you can compare the effects of market volatilities on Sanofi ADR 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 Sanofi ADR with a short position of AGNC Investment. Check out your portfolio center. Please also check ongoing floating volatility patterns of Sanofi ADR and AGNC Investment.
Diversification Opportunities for Sanofi ADR and AGNC Investment
0.56 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Sanofi and AGNC is 0.56. Overlapping area represents the amount of risk that can be diversified away by holding Sanofi ADR 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 Sanofi ADR 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 Sanofi ADR 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 Sanofi ADR i.e., Sanofi ADR and AGNC Investment go up and down completely randomly.
Pair Corralation between Sanofi ADR and AGNC Investment
Considering the 90-day investment horizon Sanofi ADR is expected to generate 1.81 times more return on investment than AGNC Investment. However, Sanofi ADR is 1.81 times more volatile than AGNC Investment Corp. It trades about 0.18 of its potential returns per unit of risk. AGNC Investment Corp is currently generating about 0.23 per unit of risk. If you would invest 4,593 in Sanofi ADR on February 12, 2024 and sell it today you would earn a total of 335.00 from holding Sanofi ADR or generate 7.29% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Sanofi ADR vs. AGNC Investment Corp
Performance |
| Timeline |
| Sanofi ADR |
| AGNC Investment Corp |
Sanofi ADR and AGNC Investment Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Sanofi ADR and AGNC Investment
The main advantage of trading using opposite Sanofi ADR and AGNC Investment positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Sanofi ADR 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.| Sanofi ADR vs. Dell Technologies | Sanofi ADR vs. MIRA Pharmaceuticals Common | Sanofi ADR vs. Planet Fitness | Sanofi ADR vs. VanEck Pharmaceutical ETF |
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 Headlines Timeline module to stay connected to all market stories and filter out noise. Drill down to analyze hype elasticity.
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