Correlation Between Annaly Capital and Plasson Indus
Can any of the company-specific risk be diversified away by investing in both Annaly Capital and Plasson Indus 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 Plasson Indus 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 Plasson Indus, you can compare the effects of market volatilities on Annaly Capital and Plasson Indus 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 Plasson Indus. Check out your portfolio center. Please also check ongoing floating volatility patterns of Annaly Capital and Plasson Indus.
Diversification Opportunities for Annaly Capital and Plasson Indus
0.31 | Correlation Coefficient |
Weak diversification
The 3 months correlation between Annaly and Plasson is 0.31. Overlapping area represents the amount of risk that can be diversified away by holding Annaly Capital Management and Plasson Indus in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Plasson Indus 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 Plasson Indus. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Plasson Indus has no effect on the direction of Annaly Capital i.e., Annaly Capital and Plasson Indus go up and down completely randomly.
Pair Corralation between Annaly Capital and Plasson Indus
Considering the 90-day investment horizon Annaly Capital Management is expected to under-perform the Plasson Indus. But the stock apears to be less risky and, when comparing its historical volatility, Annaly Capital Management is 1.63 times less risky than Plasson Indus. The stock trades about -0.19 of its potential returns per unit of risk. The Plasson Indus is currently generating about -0.08 of returns per unit of risk over similar time horizon. If you would invest 1,446,000 in Plasson Indus on January 24, 2024 and sell it today you would lose (55,000) from holding Plasson Indus or give up 3.8% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 85.0% |
| Values | Daily Returns |
Annaly Capital Management vs. Plasson Indus
Performance |
| Timeline |
| Annaly Capital Management |
| Plasson Indus |
Annaly Capital and Plasson Indus Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Annaly Capital and Plasson Indus
The main advantage of trading using opposite Annaly Capital and Plasson Indus positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Annaly Capital position performs unexpectedly, Plasson Indus 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 Plasson Indus will offset losses from the drop in Plasson Indus' long position.| Annaly Capital vs. ARMOUR Residential REIT | Annaly Capital vs. Two Harbors Investments | Annaly Capital vs. Arbor Realty Trust | Annaly Capital vs. Chimera Investment |
| Plasson Indus vs. Al Bad Massuot Yitzhak | Plasson Indus vs. Gan Shmuel | Plasson Indus vs. Analyst IMS 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 Analyst Advice module to analyst recommendations and target price estimates broken down by several categories.
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