Correlation Between METISA Metalrgica and Annaly Capital

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

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

Diversification Opportunities for METISA Metalrgica and Annaly Capital

0.76

Correlation Coefficient

METISA Metalrgica  Annaly Capital

Poor diversification

The 3 months correlation between METISA and Annaly is 0.76. Overlapping area represents the amount of risk that can be diversified away by holding METISA Metalrgica Timboense 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 METISA Metalrgica 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 METISA Metalrgica Timboense 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 METISA Metalrgica i.e., METISA Metalrgica and Annaly Capital go up and down completely randomly.

Pair Corralation between METISA Metalrgica and Annaly Capital

Assuming the 90 days trading horizon METISA Metalrgica Timboense is expected to generate 1.08 times more return on investment than Annaly Capital. However, METISA Metalrgica is 1.08 times more volatile than Annaly Capital Management,. It trades about 0.17 of its potential returns per unit of risk. Annaly Capital Management, is currently generating about 0.11 per unit of risk. If you would invest  3,651  in METISA Metalrgica Timboense on December 23, 2024 and sell it today you would earn a total of  543.00  from holding METISA Metalrgica Timboense or generate 14.87% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Significant
Accuracy	96.67%
Values	Daily Returns

METISA Metalrgica Timboense  vs.  Annaly Capital Management,

METISA Metalrgica

Risk-Adjusted Performance

Good

Compared to the overall equity markets, risk-adjusted returns on investments in METISA Metalrgica Timboense are ranked lower than 13 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively uncertain basic indicators, METISA Metalrgica unveiled solid returns over the last few months and may actually be approaching a breakup point.

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 8 (%) of all global equities and portfolios over the last 90 days. Despite somewhat weak essential indicators, Annaly Capital may actually be approaching a critical reversion point that can send shares even higher in April 2025.

Pair Trading with METISA Metalrgica and Annaly Capital

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

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 Analyst Advice module to analyst recommendations and target price estimates broken down by several categories.