Correlation Between AGNC INVESTMENT and TRAVEL +

Can any of the company-specific risk be diversified away by investing in both AGNC INVESTMENT and TRAVEL + 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 AGNC INVESTMENT and TRAVEL + into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between AGNC INVESTMENT and TRAVEL LEISURE DL 01, you can compare the effects of market volatilities on AGNC INVESTMENT and TRAVEL + 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 AGNC INVESTMENT with a short position of TRAVEL +. Check out your portfolio center. Please also check ongoing floating volatility patterns of AGNC INVESTMENT and TRAVEL +.

Diversification Opportunities for AGNC INVESTMENT and TRAVEL +

0.82

Correlation Coefficient

AGNC INVESTMENT  TRAVEL +

Very poor diversification

The 3 months correlation between AGNC and TRAVEL is 0.82. Overlapping area represents the amount of risk that can be diversified away by holding AGNC INVESTMENT and TRAVEL LEISURE DL 01 in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on TRAVEL LEISURE DL and AGNC INVESTMENT 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 AGNC INVESTMENT are associated (or correlated) with TRAVEL +. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of TRAVEL LEISURE DL has no effect on the direction of AGNC INVESTMENT i.e., AGNC INVESTMENT and TRAVEL + go up and down completely randomly.

Pair Corralation between AGNC INVESTMENT and TRAVEL +

Assuming the 90 days trading horizon AGNC INVESTMENT is expected to generate 2.89 times less return on investment than TRAVEL +. But when comparing it to its historical volatility, AGNC INVESTMENT is 1.41 times less risky than TRAVEL +. It trades about 0.14 of its potential returns per unit of risk. TRAVEL LEISURE DL 01 is currently generating about 0.29 of returns per unit of risk over similar time horizon. If you would invest  3,500  in TRAVEL LEISURE DL 01 on April 20, 2025 and sell it today you would earn a total of  1,380  from holding TRAVEL LEISURE DL 01 or generate 39.43% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Strong
Accuracy	100.0%
Values	Daily Returns

AGNC INVESTMENT  vs.  TRAVEL LEISURE DL 01

AGNC INVESTMENT

Risk-Adjusted Performance

OK

Compared to the overall equity markets, risk-adjusted returns on investments in AGNC INVESTMENT are ranked lower than 10 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively fragile basic indicators, AGNC INVESTMENT may actually be approaching a critical reversion point that can send shares even higher in August 2025.

TRAVEL LEISURE DL

Risk-Adjusted Performance

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in TRAVEL LEISURE DL 01 are ranked lower than 22 (%) of all global equities and portfolios over the last 90 days. Despite nearly fragile basic indicators, TRAVEL + reported solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with AGNC INVESTMENT and TRAVEL +

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

The idea behind AGNC INVESTMENT and TRAVEL LEISURE DL 01 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 Anywhere module to track or share privately all of your investments from the convenience of any device.