Correlation Between Annaly Capital and Invesco
Can any of the company-specific risk be diversified away by investing in both Annaly Capital and Invesco 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 Annaly Capital and Invesco into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Annaly Capital Management and Invesco, you can compare the effects of market volatilities on Annaly Capital and Invesco 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 Annaly Capital with a short position of Invesco. Check out your portfolio center. Please also check ongoing floating volatility patterns of Annaly Capital and Invesco.
Diversification Opportunities for Annaly Capital and Invesco
0.0 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between Annaly and Invesco is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding Annaly Capital Management and Invesco in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Invesco and Annaly Capital 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 Annaly Capital Management are associated (or correlated) with Invesco. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Invesco has no effect on the direction of Annaly Capital i.e., Annaly Capital and Invesco go up and down completely randomly.
Pair Corralation between Annaly Capital and Invesco
If you would invest (100.00) in Invesco on January 20, 2024 and sell it today you would earn a total of 100.00 from holding Invesco or generate -100.0% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Flat |
| Strength | Insignificant |
| Accuracy | 0.0% |
| Values | Daily Returns |
Annaly Capital Management vs. Invesco
Performance |
| Timeline |
| Annaly Capital Management |
| Invesco |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
Annaly Capital and Invesco Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Annaly Capital and Invesco
The main advantage of trading using opposite Annaly Capital and Invesco positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Annaly Capital position performs unexpectedly, Invesco 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 Invesco will offset losses from the drop in Invesco's long position.The idea behind Annaly Capital Management and Invesco 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.Check out your portfolio center.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 Bollinger Bands module to use Bollinger Bands indicator to analyze target price for a given investing horizon.
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