Correlation Between Apple and Annaly Capital

Can any of the company-specific risk be diversified away by investing in both Apple 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 Apple and Annaly Capital into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between Apple Inc and Annaly Capital Management,, you can compare the effects of market volatilities on Apple 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 Apple with a short position of Annaly Capital. Check out your portfolio center. Please also check ongoing floating volatility patterns of Apple and Annaly Capital.

Diversification Opportunities for Apple and Annaly Capital

-0.54

Correlation Coefficient

Apple  Annaly Capital

Excellent diversification

The 3 months correlation between Apple and Annaly is -0.54. Overlapping area represents the amount of risk that can be diversified away by holding Apple Inc 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 Apple 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 Apple Inc 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 Apple i.e., Apple and Annaly Capital go up and down completely randomly.

Pair Corralation between Apple and Annaly Capital

Assuming the 90 days trading horizon Apple Inc is expected to under-perform the Annaly Capital. In addition to that, Apple is 1.38 times more volatile than Annaly Capital Management,. It trades about -0.19 of its total potential returns per unit of risk. Annaly Capital Management, is currently generating about 0.1 per unit of volatility. If you would invest  11,327  in Annaly Capital Management, on December 25, 2024 and sell it today you would earn a total of  848.00  from holding Annaly Capital Management, or generate 7.49% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Very Weak
Accuracy	96.67%
Values	Daily Returns

Apple Inc  vs.  Annaly Capital Management,

Apple Inc

Risk-Adjusted Performance

Very Weak

Over the last 90 days Apple Inc has generated negative risk-adjusted returns adding no value to investors with long positions. Despite uncertain performance in the last few months, the Stock's basic indicators remain somewhat strong which may send shares a bit higher in April 2025. The current disturbance may also be a sign of long term up-swing for the company investors.

Annaly Capital Manag

Risk-Adjusted Performance

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Annaly Capital Management, are ranked lower than 7 (%) of all global equities and portfolios over the last 90 days. Despite somewhat uncertain essential indicators, Annaly Capital may actually be approaching a critical reversion point that can send shares even higher in April 2025.

Pair Trading with Apple and Annaly Capital

The main advantage of trading using opposite Apple and Annaly Capital positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Apple 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.

The idea behind Apple Inc and Annaly Capital Management, pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.

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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 Technical Analysis module to check basic technical indicators and analysis based on most latest market data.