Correlation Between Annaly Capital and Waste Management
Can any of the company-specific risk be diversified away by investing in both Annaly Capital and Waste Management 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 Waste Management 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 Waste Management, you can compare the effects of market volatilities on Annaly Capital and Waste Management 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 Waste Management. Check out your portfolio center. Please also check ongoing floating volatility patterns of Annaly Capital and Waste Management.
Diversification Opportunities for Annaly Capital and Waste Management
0.51 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Annaly and Waste is 0.51. Overlapping area represents the amount of risk that can be diversified away by holding Annaly Capital Management, and Waste Management in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Waste Management 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 Waste Management. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Waste Management has no effect on the direction of Annaly Capital i.e., Annaly Capital and Waste Management go up and down completely randomly.
Pair Corralation between Annaly Capital and Waste Management
Assuming the 90 days trading horizon Annaly Capital Management, is expected to under-perform the Waste Management. In addition to that, Annaly Capital is 1.39 times more volatile than Waste Management. It trades about -0.03 of its total potential returns per unit of risk. Waste Management is currently generating about 0.09 per unit of volatility. If you would invest 63,180 in Waste Management on October 20, 2024 and sell it today you would earn a total of 958.00 from holding Waste Management or generate 1.52% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 78.95% |
| Values | Daily Returns |
Annaly Capital Management, vs. Waste Management
Performance |
| Timeline |
| Annaly Capital Manag |
| Waste Management |
Annaly Capital and Waste Management Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Annaly Capital and Waste Management
The main advantage of trading using opposite Annaly Capital and Waste Management positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Annaly Capital position performs unexpectedly, Waste Management 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 Waste Management will offset losses from the drop in Waste Management's long position.| Annaly Capital vs. Taiwan Semiconductor Manufacturing | Annaly Capital vs. Apple Inc | Annaly Capital vs. Alibaba Group Holding | Annaly Capital vs. Microsoft |
| Waste Management vs. Annaly Capital Management, | Waste Management vs. NXP Semiconductors NV | Waste Management vs. Academy Sports and | Waste Management vs. Globus Medical, |
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 Center module to all portfolio management and optimization tools to improve performance of your portfolios.
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