Correlation Between Nordon Indstrias and Annaly Capital
Can any of the company-specific risk be diversified away by investing in both Nordon Indstrias 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 Nordon Indstrias and Annaly Capital into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Nordon Indstrias Metalrgicas and Annaly Capital Management,, you can compare the effects of market volatilities on Nordon Indstrias 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 Nordon Indstrias with a short position of Annaly Capital. Check out your portfolio center. Please also check ongoing floating volatility patterns of Nordon Indstrias and Annaly Capital.
Diversification Opportunities for Nordon Indstrias and Annaly Capital
-0.65 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Nordon and Annaly is -0.65. Overlapping area represents the amount of risk that can be diversified away by holding Nordon Indstrias Metalrgicas 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 Nordon Indstrias 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 Nordon Indstrias Metalrgicas 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 Nordon Indstrias i.e., Nordon Indstrias and Annaly Capital go up and down completely randomly.
Pair Corralation between Nordon Indstrias and Annaly Capital
Assuming the 90 days trading horizon Nordon Indstrias Metalrgicas is expected to under-perform the Annaly Capital. In addition to that, Nordon Indstrias is 1.34 times more volatile than Annaly Capital Management,. It trades about -0.26 of its total potential returns per unit of risk. Annaly Capital Management, is currently generating about 0.18 per unit of volatility. If you would invest 11,308 in Annaly Capital Management, on November 3, 2024 and sell it today you would earn a total of 574.00 from holding Annaly Capital Management, or generate 5.08% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Nordon Indstrias Metalrgicas vs. Annaly Capital Management,
Performance |
| Timeline |
| Nordon Indstrias Met |
| Annaly Capital Manag |
Nordon Indstrias and Annaly Capital Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Nordon Indstrias and Annaly Capital
The main advantage of trading using opposite Nordon Indstrias and Annaly Capital positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Nordon Indstrias 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.| Nordon Indstrias vs. METISA Metalrgica Timboense | Nordon Indstrias vs. Lupatech SA | Nordon Indstrias vs. Refinaria de Petrleos | Nordon Indstrias vs. Electro Ao Altona |
| Annaly Capital vs. Academy Sports and | Annaly Capital vs. Hormel Foods | Annaly Capital vs. United Natural Foods, | Annaly Capital vs. Charter Communications |
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 ETF Categories module to list of ETF categories grouped based on various criteria, such as the investment strategy or type of investments.
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