Correlation Between AGNC Investment and Wattanapat Hospital

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

By analyzing existing cross correlation between AGNC Investment Corp and Wattanapat Hospital Trang, you can compare the effects of market volatilities on AGNC Investment and Wattanapat Hospital 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 Wattanapat Hospital. Check out your portfolio center. Please also check ongoing floating volatility patterns of AGNC Investment and Wattanapat Hospital.

Diversification Opportunities for AGNC Investment and Wattanapat Hospital

0.41

Correlation Coefficient

AGNC Investment  Wattanapat Hospital

Very weak diversification

The 3 months correlation between AGNC and Wattanapat is 0.41. Overlapping area represents the amount of risk that can be diversified away by holding AGNC Investment Corp and Wattanapat Hospital Trang in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Wattanapat Hospital Trang 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 Corp are associated (or correlated) with Wattanapat Hospital. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Wattanapat Hospital Trang has no effect on the direction of AGNC Investment i.e., AGNC Investment and Wattanapat Hospital go up and down completely randomly.

Pair Corralation between AGNC Investment and Wattanapat Hospital

Given the investment horizon of 90 days AGNC Investment is expected to generate 11.27 times less return on investment than Wattanapat Hospital. But when comparing it to its historical volatility, AGNC Investment Corp is 2.52 times less risky than Wattanapat Hospital. It trades about 0.04 of its potential returns per unit of risk. Wattanapat Hospital Trang is currently generating about 0.19 of returns per unit of risk over similar time horizon. If you would invest  634.00  in Wattanapat Hospital Trang on February 3, 2024 and sell it today you would earn a total of  241.00  from holding Wattanapat Hospital Trang or generate 38.01% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Weak
Accuracy	93.65%
Values	Daily Returns

AGNC Investment Corp  vs.  Wattanapat Hospital Trang

AGNC Investment Corp

Risk-Adjusted Performance

3 of 100

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in AGNC Investment Corp are ranked lower than 3 (%) of all global equities and portfolios over the last 90 days. In spite of rather sound basic indicators, AGNC Investment is not utilizing all of its potentials. The recent stock price tumult, may contribute to shorter-term losses for the shareholders.

Wattanapat Hospital Trang

Risk-Adjusted Performance

14 of 100

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Wattanapat Hospital Trang are ranked lower than 14 (%) of all global equities and portfolios over the last 90 days. Despite quite conflicting technical indicators, Wattanapat Hospital disclosed solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with AGNC Investment and Wattanapat Hospital

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

The idea behind AGNC Investment Corp and Wattanapat Hospital Trang 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 Aroon Oscillator module to analyze current equity momentum using Aroon Oscillator and other momentum ratios.