Correlation Between Cherry Hill and AGNC Investment
Can any of the company-specific risk be diversified away by investing in both Cherry Hill 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 Cherry Hill and AGNC Investment into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Cherry Hill Mortgage and AGNC Investment Corp, you can compare the effects of market volatilities on Cherry Hill 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 Cherry Hill with a short position of AGNC Investment. Check out your portfolio center. Please also check ongoing floating volatility patterns of Cherry Hill and AGNC Investment.
Diversification Opportunities for Cherry Hill and AGNC Investment
0.68 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Cherry and AGNC is 0.68. Overlapping area represents the amount of risk that can be diversified away by holding Cherry Hill Mortgage 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 Cherry Hill 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 Cherry Hill Mortgage 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 Cherry Hill i.e., Cherry Hill and AGNC Investment go up and down completely randomly.
Pair Corralation between Cherry Hill and AGNC Investment
Given the investment horizon of 90 days Cherry Hill Mortgage is expected to generate 1.3 times more return on investment than AGNC Investment. However, Cherry Hill is 1.3 times more volatile than AGNC Investment Corp. It trades about 0.29 of its potential returns per unit of risk. AGNC Investment Corp is currently generating about 0.24 per unit of risk. If you would invest 343.00 in Cherry Hill Mortgage on February 26, 2024 and sell it today you would earn a total of 25.00 from holding Cherry Hill Mortgage or generate 7.29% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Cherry Hill Mortgage vs. AGNC Investment Corp
Performance |
| Timeline |
| Cherry Hill Mortgage |
| AGNC Investment Corp |
Cherry Hill and AGNC Investment Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Cherry Hill and AGNC Investment
The main advantage of trading using opposite Cherry Hill and AGNC Investment positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Cherry Hill 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.The idea behind Cherry Hill Mortgage and AGNC Investment Corp 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 Funds Screener module to find actively-traded funds from around the world traded on over 30 global exchanges.
Other Complementary Tools
| Fundamental Analysis View fundamental data based on most recent published financial statements | |
| Economic Indicators Top statistical indicators that provide insights into how an economy is performing | |
| Equity Valuation Check real value of public entities based on technical and fundamental data | |
| Risk-Return Analysis View associations between returns expected from investment and the risk you assume | |
| Earnings Calls Check upcoming earnings announcements updated hourly across public exchanges | |
| Stock Screener Find equities using a custom stock filter or screen asymmetry in trading patterns, price, volume, or investment outlook. | |
| Efficient Frontier Plot and analyze your portfolio and positions against risk-return landscape of the market. | |
| Portfolio Analyzer Portfolio analysis module that provides access to portfolio diagnostics and optimization engine | |
| Bonds Directory Find actively traded corporate debentures issued by US companies | |
| Performance Analysis Check effects of mean-variance optimization against your current asset allocation | |
| Portfolio Center All portfolio management and optimization tools to improve performance of your portfolios | |
| Bollinger Bands Use Bollinger Bands indicator to analyze target price for a given investing horizon | |
| Alpha Finder Use alpha and beta coefficients to find investment opportunities after accounting for the risk |