Correlation Between AGNC Investment and Pimco Emerging

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

Diversification Opportunities for AGNC Investment and Pimco Emerging

0.85

Correlation Coefficient

AGNC Investment  Pimco Emerging

Very poor diversification

The 3 months correlation between AGNC and Pimco is 0.85. Overlapping area represents the amount of risk that can be diversified away by holding AGNC Investment Corp and Pimco Emerging Local in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Pimco Emerging Local 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 Pimco Emerging. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Pimco Emerging Local has no effect on the direction of AGNC Investment i.e., AGNC Investment and Pimco Emerging go up and down completely randomly.

Pair Corralation between AGNC Investment and Pimco Emerging

Given the investment horizon of 90 days AGNC Investment Corp is expected to generate 3.18 times more return on investment than Pimco Emerging. However, AGNC Investment is 3.18 times more volatile than Pimco Emerging Local. It trades about 0.21 of its potential returns per unit of risk. Pimco Emerging Local is currently generating about 0.19 per unit of risk. If you would invest  839.00  in AGNC Investment Corp on May 7, 2025 and sell it today you would earn a total of  124.00  from holding AGNC Investment Corp or generate 14.78% return on investment over 90 days.

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

AGNC Investment Corp  vs.  Pimco Emerging Local

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 16 (%) of all global equities and portfolios over the last 90 days. In spite of rather unfluctuating basic indicators, AGNC Investment exhibited solid returns over the last few months and may actually be approaching a breakup point.

Pimco Emerging Local

Risk-Adjusted Performance

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Pimco Emerging Local are ranked lower than 15 (%) of all funds and portfolios of funds over the last 90 days. In spite of fairly strong basic indicators, Pimco Emerging is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

Pair Trading with AGNC Investment and Pimco Emerging

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

The idea behind AGNC Investment Corp and Pimco Emerging Local 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 Bond Analysis module to evaluate and analyze corporate bonds as a potential investment for your portfolios..