Correlation Between Patria Investments and Annaly Capital
Can any of the company-specific risk be diversified away by investing in both Patria Investments 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 Patria Investments and Annaly Capital into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Patria Investments Limited and Annaly Capital Management,, you can compare the effects of market volatilities on Patria Investments 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 Patria Investments with a short position of Annaly Capital. Check out your portfolio center. Please also check ongoing floating volatility patterns of Patria Investments and Annaly Capital.
Diversification Opportunities for Patria Investments and Annaly Capital
0.8 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Patria and Annaly is 0.8. Overlapping area represents the amount of risk that can be diversified away by holding Patria Investments 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 Patria Investments 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 Patria Investments 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 Patria Investments i.e., Patria Investments and Annaly Capital go up and down completely randomly.
Pair Corralation between Patria Investments and Annaly Capital
Assuming the 90 days trading horizon Patria Investments Limited is expected to under-perform the Annaly Capital. In addition to that, Patria Investments is 1.26 times more volatile than Annaly Capital Management,. It trades about -0.32 of its total potential returns per unit of risk. Annaly Capital Management, is currently generating about -0.03 per unit of volatility. If you would invest 11,327 in Annaly Capital Management, on October 20, 2024 and sell it today you would lose (71.00) from holding Annaly Capital Management, or give up 0.63% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 78.95% |
| Values | Daily Returns |
Patria Investments Limited vs. Annaly Capital Management,
Performance |
| Timeline |
| Patria Investments |
| Annaly Capital Manag |
Patria Investments and Annaly Capital Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Patria Investments and Annaly Capital
The main advantage of trading using opposite Patria Investments and Annaly Capital positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Patria Investments 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.| Patria Investments vs. Unity Software | Patria Investments vs. DENTSPLY SIRONA | Patria Investments vs. Take Two Interactive Software | Patria Investments vs. MAHLE Metal Leve |
| Annaly Capital vs. Taiwan Semiconductor Manufacturing | Annaly Capital vs. Apple Inc | Annaly Capital vs. Alibaba Group Holding | Annaly Capital vs. Microsoft |
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 Bond Analysis module to evaluate and analyze corporate bonds as a potential investment for your portfolios..
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