Correlation Between Ecc Cap and AG Mortgage

Can any of the company-specific risk be diversified away by investing in both Ecc Cap and AG Mortgage 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 Ecc Cap and AG Mortgage into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between Ecc Cap Corp and AG Mortgage Investment, you can compare the effects of market volatilities on Ecc Cap and AG Mortgage 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 Ecc Cap with a short position of AG Mortgage. Check out your portfolio center. Please also check ongoing floating volatility patterns of Ecc Cap and AG Mortgage.

Diversification Opportunities for Ecc Cap and AG Mortgage

-0.21

Correlation Coefficient

Ecc Cap  AG Mortgage

Very good diversification

The 3 months correlation between Ecc and MITT-PC is -0.21. Overlapping area represents the amount of risk that can be diversified away by holding Ecc Cap Corp and AG Mortgage Investment in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on AG Mortgage Investment and Ecc Cap 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 Ecc Cap Corp are associated (or correlated) with AG Mortgage. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of AG Mortgage Investment has no effect on the direction of Ecc Cap i.e., Ecc Cap and AG Mortgage go up and down completely randomly.

Pair Corralation between Ecc Cap and AG Mortgage

If you would invest  1,539  in AG Mortgage Investment on September 27, 2024 and sell it today you would earn a total of  960.00  from holding AG Mortgage Investment or generate 62.38% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Insignificant
Accuracy	0.84%
Values	Daily Returns

Ecc Cap Corp  vs.  AG Mortgage Investment

Ecc Cap Corp

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Ecc Cap Corp has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of very healthy basic indicators, Ecc Cap is not utilizing all of its potentials. The latest stock price disarray, may contribute to short-term losses for the investors.

AG Mortgage Investment

Risk-Adjusted Performance

16 of 100

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in AG Mortgage Investment are ranked lower than 16 (%) of all global equities and portfolios over the last 90 days. In spite of rather sound fundamental indicators, AG Mortgage is not utilizing all of its potentials. The current stock price tumult, may contribute to shorter-term losses for the shareholders.

Pair Trading with Ecc Cap and AG Mortgage

The main advantage of trading using opposite Ecc Cap and AG Mortgage positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Ecc Cap position performs unexpectedly, AG Mortgage 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 AG Mortgage will offset losses from the drop in AG Mortgage's long position.

The idea behind Ecc Cap Corp and AG Mortgage Investment 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.

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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 Dashboard module to portfolio dashboard that provides centralized access to all your investments.