Correlation Between Annaly Capital and Goldman Sachs

Can any of the company-specific risk be diversified away by investing in both Annaly Capital and Goldman Sachs 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 Goldman Sachs 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 Goldman Sachs Government, you can compare the effects of market volatilities on Annaly Capital and Goldman Sachs 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 Goldman Sachs. Check out your portfolio center. Please also check ongoing floating volatility patterns of Annaly Capital and Goldman Sachs.

Diversification Opportunities for Annaly Capital and Goldman Sachs

0.61

Correlation Coefficient

Annaly Capital  Goldman Sachs

Poor diversification

The 3 months correlation between Annaly and Goldman is 0.61. Overlapping area represents the amount of risk that can be diversified away by holding Annaly Capital Management and Goldman Sachs Government in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Goldman Sachs Government 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 Goldman Sachs. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Goldman Sachs Government has no effect on the direction of Annaly Capital i.e., Annaly Capital and Goldman Sachs go up and down completely randomly.

Pair Corralation between Annaly Capital and Goldman Sachs

Considering the 90-day investment horizon Annaly Capital Management is expected to generate 3.23 times more return on investment than Goldman Sachs. However, Annaly Capital is 3.23 times more volatile than Goldman Sachs Government. It trades about 0.18 of its potential returns per unit of risk. Goldman Sachs Government is currently generating about 0.07 per unit of risk. If you would invest  1,833  in Annaly Capital Management on May 6, 2025 and sell it today you would earn a total of  218.00  from holding Annaly Capital Management or generate 11.89% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Significant
Accuracy	98.41%
Values	Daily Returns

Annaly Capital Management  vs.  Goldman Sachs Government

Annaly Capital Management

Risk-Adjusted Performance

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Annaly Capital Management are ranked lower than 14 (%) of all global equities and portfolios over the last 90 days. In spite of fairly weak essential indicators, Annaly Capital may actually be approaching a critical reversion point that can send shares even higher in September 2025.

Goldman Sachs Government

Risk-Adjusted Performance

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in Goldman Sachs Government are ranked lower than 5 (%) of all funds and portfolios of funds over the last 90 days. In spite of fairly strong basic indicators, Goldman Sachs is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

Pair Trading with Annaly Capital and Goldman Sachs

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

The idea behind Annaly Capital Management and Goldman Sachs Government 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 Idea Analyzer module to analyze all characteristics, volatility and risk-adjusted return of Macroaxis ideas.