Correlation Between Jaguar Animal and Annaly Capital

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

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

Diversification Opportunities for Jaguar Animal and Annaly Capital

0.58

Correlation Coefficient

Jaguar Animal  Annaly Capital

Very weak diversification

The 3 months correlation between Jaguar and Annaly is 0.58. Overlapping area represents the amount of risk that can be diversified away by holding Jaguar Animal Health 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 Jaguar Animal 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 Jaguar Animal Health 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 Jaguar Animal i.e., Jaguar Animal and Annaly Capital go up and down completely randomly.

Pair Corralation between Jaguar Animal and Annaly Capital

Given the investment horizon of 90 days Jaguar Animal Health is expected to generate 43.13 times more return on investment than Annaly Capital. However, Jaguar Animal is 43.13 times more volatile than Annaly Capital Management. It trades about 0.35 of its potential returns per unit of risk. Annaly Capital Management is currently generating about 0.13 per unit of risk. If you would invest  11.00  in Jaguar Animal Health on February 11, 2024 and sell it today you would earn a total of  18.00  from holding Jaguar Animal Health or generate 163.64% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Weak
Accuracy	100.0%
Values	Daily Returns

Jaguar Animal Health  vs.  Annaly Capital Management

Jaguar Animal Health

Risk-Adjusted Performance

14 of 100

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Jaguar Animal Health are ranked lower than 14 (%) of all global equities and portfolios over the last 90 days. In spite of fairly weak technical and fundamental indicators, Jaguar Animal showed solid returns over the last few months and may actually be approaching a breakup point.

Annaly Capital Management

Risk-Adjusted Performance

7 of 100

Modest

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 fairly strong basic indicators, Annaly Capital is not utilizing all of its potentials. The current stock price confusion, may contribute to short-horizon losses for the traders.

Pair Trading with Jaguar Animal and Annaly Capital

The main advantage of trading using opposite Jaguar Animal and Annaly Capital positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Jaguar Animal 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 Jaguar Animal Health 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 Funds Screener module to find actively-traded funds from around the world traded on over 30 global exchanges.