Correlation Between Annaly Capital and Zebra Technologies

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

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

Diversification Opportunities for Annaly Capital and Zebra Technologies

0.74

Correlation Coefficient

Annaly Capital  Zebra Technologies

Poor diversification

The 3 months correlation between Annaly and Zebra is 0.74. Overlapping area represents the amount of risk that can be diversified away by holding Annaly Capital Management, and Zebra Technologies in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Zebra Technologies and Annaly 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 Annaly Capital Management, are associated (or correlated) with Zebra Technologies. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Zebra Technologies has no effect on the direction of Annaly Capital i.e., Annaly Capital and Zebra Technologies go up and down completely randomly.

Pair Corralation between Annaly Capital and Zebra Technologies

Assuming the 90 days trading horizon Annaly Capital Management, is expected to generate 1.53 times more return on investment than Zebra Technologies. However, Annaly Capital is 1.53 times more volatile than Zebra Technologies. It trades about -0.13 of its potential returns per unit of risk. Zebra Technologies is currently generating about -0.24 per unit of risk. If you would invest  11,878  in Annaly Capital Management, on October 8, 2024 and sell it today you would lose (343.00) from holding Annaly Capital Management, or give up 2.89% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Significant
Accuracy	88.24%
Values	Daily Returns

Annaly Capital Management,  vs.  Zebra Technologies

Annaly Capital Manag

Risk-Adjusted Performance

0 of 100

OK

Over the last 90 days Annaly Capital Management, has generated negative risk-adjusted returns adding no value to investors with long positions. Despite somewhat weak essential indicators, Annaly Capital may actually be approaching a critical reversion point that can send shares even higher in February 2025.

Zebra Technologies

Risk-Adjusted Performance

15 of 100

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Zebra Technologies are ranked lower than 15 (%) of all global equities and portfolios over the last 90 days. Despite somewhat weak fundamental drivers, Zebra Technologies sustained solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Annaly Capital and Zebra Technologies

The main advantage of trading using opposite Annaly Capital and Zebra Technologies positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Annaly Capital position performs unexpectedly, Zebra Technologies 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 Zebra Technologies will offset losses from the drop in Zebra Technologies' long position.

The idea behind Annaly Capital Management, and Zebra Technologies 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 Commodity Channel module to use Commodity Channel Index to analyze current equity momentum.