Correlation Between Infosys and Annaly Capital
Can any of the company-specific risk be diversified away by investing in both Infosys 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 Infosys and Annaly Capital into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Infosys Limited and Annaly Capital Management,, you can compare the effects of market volatilities on Infosys 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 Infosys with a short position of Annaly Capital. Check out your portfolio center. Please also check ongoing floating volatility patterns of Infosys and Annaly Capital.
Diversification Opportunities for Infosys and Annaly Capital
0.48 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Infosys and Annaly is 0.48. Overlapping area represents the amount of risk that can be diversified away by holding Infosys Limited 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 Infosys 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 Infosys Limited 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 Infosys i.e., Infosys and Annaly Capital go up and down completely randomly.
Pair Corralation between Infosys and Annaly Capital
Assuming the 90 days trading horizon Infosys Limited is expected to under-perform the Annaly Capital. In addition to that, Infosys is 1.01 times more volatile than Annaly Capital Management,. It trades about -0.07 of its total potential returns per unit of risk. Annaly Capital Management, is currently generating about 0.04 per unit of volatility. If you would invest 11,692 in Annaly Capital Management, on November 3, 2024 and sell it today you would earn a total of 190.00 from holding Annaly Capital Management, or generate 1.63% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 97.5% |
| Values | Daily Returns |
Infosys Limited vs. Annaly Capital Management,
Performance |
| Timeline |
| Infosys Limited |
| Annaly Capital Manag |
Infosys and Annaly Capital Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Infosys and Annaly Capital
The main advantage of trading using opposite Infosys and Annaly Capital positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Infosys 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.| Infosys vs. Beyond Meat | Infosys vs. Apartment Investment and | Infosys vs. GP Investments | Infosys vs. Taiwan Semiconductor Manufacturing |
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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 Portfolio Manager module to state of the art Portfolio Manager to monitor and improve performance of your invested capital.
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