Correlation Between AGNC Investment and CSWI Old

Can any of the company-specific risk be diversified away by investing in both AGNC Investment and CSWI Old 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 CSWI Old 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 CSWI Old, you can compare the effects of market volatilities on AGNC Investment and CSWI Old 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 CSWI Old. Check out your portfolio center. Please also check ongoing floating volatility patterns of AGNC Investment and CSWI Old.

Diversification Opportunities for AGNC Investment and CSWI Old

0.45

Correlation Coefficient

AGNC Investment  CSWI Old

Very weak diversification

The 3 months correlation between AGNC and CSWI is 0.45. Overlapping area represents the amount of risk that can be diversified away by holding AGNC Investment Corp and CSWI Old in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on CSWI Old 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 CSWI Old. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of CSWI Old has no effect on the direction of AGNC Investment i.e., AGNC Investment and CSWI Old go up and down completely randomly.

Pair Corralation between AGNC Investment and CSWI Old

Given the investment horizon of 90 days AGNC Investment Corp is expected to generate 0.99 times more return on investment than CSWI Old. However, AGNC Investment Corp is 1.01 times less risky than CSWI Old. It trades about 0.23 of its potential returns per unit of risk. CSWI Old is currently generating about 0.23 per unit of risk. If you would invest  850.00  in AGNC Investment Corp on June 1, 2025 and sell it today you would earn a total of  126.00  from holding AGNC Investment Corp or generate 14.82% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Weak
Accuracy	9.52%
Values	Daily Returns

AGNC Investment Corp  vs.  CSWI Old

AGNC Investment Corp

Risk-Adjusted Performance

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in AGNC Investment Corp are ranked lower than 18 (%) of all global equities and portfolios over the last 90 days. In spite of rather unsteady basic indicators, AGNC Investment exhibited solid returns over the last few months and may actually be approaching a breakup point.

CSWI Old

Risk-Adjusted Performance

Solid

Over the last 90 days CSWI Old has generated negative risk-adjusted returns adding no value to investors with long positions. Despite fairly unsteady basic indicators, CSWI Old demonstrated solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with AGNC Investment and CSWI Old

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

The idea behind AGNC Investment Corp and CSWI Old 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 Financial Widgets module to easily integrated Macroaxis content with over 30 different plug-and-play financial widgets.