Correlation Between Annaly Capital and Ssga High

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

Diversification Opportunities for Annaly Capital and Ssga High

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  Correlation Coefficient

Pay attention - limited upside

The 3 months correlation between Annaly and Ssga is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding Annaly Capital Management and SSGA HIGH YIELD in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Ssga High Yield 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 Ssga High. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Ssga High Yield has no effect on the direction of Annaly Capital i.e., Annaly Capital and Ssga High go up and down completely randomly.

Pair Corralation between Annaly Capital and Ssga High

If you would invest  2,071  in Annaly Capital Management on December 29, 2023 and sell it today you would lose (127.00) from holding Annaly Capital Management or give up 6.13% of portfolio value over 90 days.
Time Period3 Months [change]
DirectionFlat 
StrengthInsignificant
Accuracy0.0%
ValuesDaily Returns

Annaly Capital Management  vs.  SSGA HIGH YIELD

 Performance 
       Timeline  
Annaly Capital Management 

Risk-Adjusted Performance

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Over the last 90 days Annaly Capital Management has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of fairly strong essential indicators, Annaly Capital is not utilizing all of its potentials. The latest stock price disturbance, may contribute to short-term losses for the investors.
Ssga High Yield 

Risk-Adjusted Performance

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Low
 
High
Very Weak
Over the last 90 days Ssga High Yield has generated negative risk-adjusted returns adding no value to fund investors. In spite of fairly strong forward-looking indicators, Ssga High is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

Annaly Capital and Ssga High Volatility Contrast

   Predicted Return Density   
       Returns  

Pair Trading with Annaly Capital and Ssga High

The main advantage of trading using opposite Annaly Capital and Ssga High positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Annaly Capital position performs unexpectedly, Ssga High 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 Ssga High will offset losses from the drop in Ssga High's long position.
The idea behind Annaly Capital Management and Ssga High Yield 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 Equity Forecasting module to use basic forecasting models to generate price predictions and determine price momentum.

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