Correlation Between Advanced Micro and Annaly Capital
Can any of the company-specific risk be diversified away by investing in both Advanced Micro and Annaly Capital 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 Advanced Micro and Annaly Capital into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Advanced Micro Devices and Annaly Capital Management,, you can compare the effects of market volatilities on Advanced Micro and Annaly Capital 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 Advanced Micro with a short position of Annaly Capital. Check out your portfolio center. Please also check ongoing floating volatility patterns of Advanced Micro and Annaly Capital.
Diversification Opportunities for Advanced Micro and Annaly Capital
-0.36 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Advanced and Annaly is -0.36. Overlapping area represents the amount of risk that can be diversified away by holding Advanced Micro Devices and Annaly Capital Management, in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Annaly Capital Manag and Advanced Micro 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 Advanced Micro Devices are associated (or correlated) with Annaly Capital. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Annaly Capital Manag has no effect on the direction of Advanced Micro i.e., Advanced Micro and Annaly Capital go up and down completely randomly.
Pair Corralation between Advanced Micro and Annaly Capital
Assuming the 90 days trading horizon Advanced Micro Devices is expected to generate 1.82 times more return on investment than Annaly Capital. However, Advanced Micro is 1.82 times more volatile than Annaly Capital Management,. It trades about 0.06 of its potential returns per unit of risk. Annaly Capital Management, is currently generating about 0.03 per unit of risk. If you would invest 4,558 in Advanced Micro Devices on October 11, 2024 and sell it today you would earn a total of 4,642 from holding Advanced Micro Devices or generate 101.84% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 81.65% |
| Values | Daily Returns |
Advanced Micro Devices vs. Annaly Capital Management,
Performance |
| Timeline |
| Advanced Micro Devices |
| Annaly Capital Manag |
Advanced Micro and Annaly Capital Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Advanced Micro and Annaly Capital
The main advantage of trading using opposite Advanced Micro and Annaly Capital positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Advanced Micro position performs unexpectedly, Annaly Capital 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 Annaly Capital will offset losses from the drop in Annaly Capital's long position.| Advanced Micro vs. Spotify Technology SA | Advanced Micro vs. Omega Healthcare Investors, | Advanced Micro vs. Paycom Software | Advanced Micro vs. Take Two Interactive Software |
| Annaly Capital vs. Verizon Communications | Annaly Capital vs. Unity Software | Annaly Capital vs. T Mobile | Annaly Capital vs. Metalurgica Gerdau SA |
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 Performance Analysis module to check effects of mean-variance optimization against your current asset allocation.
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