Correlation Between AGNC Investment and SPDR MSCI

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

Diversification Opportunities for AGNC Investment and SPDR MSCI

0.69

Correlation Coefficient

AGNC Investment  SPDR MSCI

Poor diversification

The 3 months correlation between AGNC and SPDR is 0.69. Overlapping area represents the amount of risk that can be diversified away by holding AGNC Investment Corp and SPDR MSCI World in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on SPDR MSCI World 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 SPDR MSCI. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of SPDR MSCI World has no effect on the direction of AGNC Investment i.e., AGNC Investment and SPDR MSCI go up and down completely randomly.

Pair Corralation between AGNC Investment and SPDR MSCI

Given the investment horizon of 90 days AGNC Investment Corp is expected to generate 1.23 times more return on investment than SPDR MSCI. However, AGNC Investment is 1.23 times more volatile than SPDR MSCI World. It trades about 0.18 of its potential returns per unit of risk. SPDR MSCI World is currently generating about 0.12 per unit of risk. If you would invest  843.00  in AGNC Investment Corp on May 5, 2025 and sell it today you would earn a total of  105.00  from holding AGNC Investment Corp or generate 12.46% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Significant
Accuracy	95.45%
Values	Daily Returns

AGNC Investment Corp  vs.  SPDR MSCI World

AGNC Investment Corp

Risk-Adjusted Performance

Good

Compared to the overall equity markets, risk-adjusted returns on investments in AGNC Investment Corp are ranked lower than 14 (%) of all global equities and portfolios over the last 90 days. In spite of rather unfluctuating basic indicators, AGNC Investment may actually be approaching a critical reversion point that can send shares even higher in September 2025.

SPDR MSCI World

Risk-Adjusted Performance

OK

Compared to the overall equity markets, risk-adjusted returns on investments in SPDR MSCI World are ranked lower than 9 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively uncertain basic indicators, SPDR MSCI may actually be approaching a critical reversion point that can send shares even higher in September 2025.

Pair Trading with AGNC Investment and SPDR MSCI

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

The idea behind AGNC Investment Corp and SPDR MSCI World 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 Fundamental Analysis module to view fundamental data based on most recent published financial statements.