Correlation Between Sachem Capital and Annaly Capital
Can any of the company-specific risk be diversified away by investing in both Sachem Capital 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 Sachem Capital and Annaly Capital into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Sachem Capital Corp and Annaly Capital Management, you can compare the effects of market volatilities on Sachem Capital 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 Sachem Capital with a short position of Annaly Capital. Check out your portfolio center. Please also check ongoing floating volatility patterns of Sachem Capital and Annaly Capital.
Diversification Opportunities for Sachem Capital and Annaly Capital
0.49 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Sachem and Annaly is 0.49. Overlapping area represents the amount of risk that can be diversified away by holding Sachem Capital Corp and Annaly Capital Management in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Annaly Capital Management and Sachem 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 Sachem Capital Corp 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 Management has no effect on the direction of Sachem Capital i.e., Sachem Capital and Annaly Capital go up and down completely randomly.
Pair Corralation between Sachem Capital and Annaly Capital
Assuming the 90 days trading horizon Sachem Capital Corp is expected to under-perform the Annaly Capital. In addition to that, Sachem Capital is 3.47 times more volatile than Annaly Capital Management. It trades about 0.0 of its total potential returns per unit of risk. Annaly Capital Management is currently generating about 0.07 per unit of volatility. If you would invest 1,955 in Annaly Capital Management on January 22, 2025 and sell it today you would earn a total of 453.00 from holding Annaly Capital Management or generate 23.17% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Sachem Capital Corp vs. Annaly Capital Management
Performance |
| Timeline |
| Sachem Capital Corp |
| Annaly Capital Management |
Sachem Capital and Annaly Capital Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Sachem Capital and Annaly Capital
The main advantage of trading using opposite Sachem Capital and Annaly Capital positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Sachem Capital 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.| Sachem Capital vs. Ready Capital | Sachem Capital vs. ARMOUR Residential REIT | Sachem Capital vs. PennyMac Mortgage Investment | Sachem Capital vs. MFA Financial |
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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 Idea Breakdown module to analyze constituents of all Macroaxis ideas. Macroaxis investment ideas are predefined, sector-focused investing themes.
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