Correlation Between Aptus Collared and Anfield Universal

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

By analyzing existing cross correlation between Aptus Collared Income and Anfield Universal Fixed, you can compare the effects of market volatilities on Aptus Collared and Anfield Universal 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 Aptus Collared with a short position of Anfield Universal. Check out your portfolio center. Please also check ongoing floating volatility patterns of Aptus Collared and Anfield Universal.

Diversification Opportunities for Aptus Collared and Anfield Universal

0.65

Correlation Coefficient

Aptus Collared  Anfield Universal

Poor diversification

The 3 months correlation between Aptus and Anfield is 0.65. Overlapping area represents the amount of risk that can be diversified away by holding Aptus Collared Income and Anfield Universal Fixed in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Anfield Universal Fixed and Aptus Collared 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 Aptus Collared Income are associated (or correlated) with Anfield Universal. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Anfield Universal Fixed has no effect on the direction of Aptus Collared i.e., Aptus Collared and Anfield Universal go up and down completely randomly.

Pair Corralation between Aptus Collared and Anfield Universal

Given the investment horizon of 90 days Aptus Collared Income is expected to under-perform the Anfield Universal. In addition to that, Aptus Collared is 4.94 times more volatile than Anfield Universal Fixed. It trades about -0.04 of its total potential returns per unit of risk. Anfield Universal Fixed is currently generating about 0.27 per unit of volatility. If you would invest  911.00  in Anfield Universal Fixed on September 23, 2024 and sell it today you would earn a total of  6.00  from holding Anfield Universal Fixed or generate 0.66% return on investment over 90 days.

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

Aptus Collared Income  vs.  Anfield Universal Fixed

Aptus Collared Income

Risk-Adjusted Performance

5 of 100

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in Aptus Collared Income are ranked lower than 5 (%) of all global equities and portfolios over the last 90 days. In spite of very healthy forward indicators, Aptus Collared is not utilizing all of its potentials. The latest stock price disarray, may contribute to short-term losses for the investors.

Anfield Universal Fixed

Risk-Adjusted Performance

10 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Anfield Universal Fixed are ranked lower than 10 (%) of all global equities and portfolios over the last 90 days. Despite nearly stable forward indicators, Anfield Universal is not utilizing all of its potentials. The latest stock price disturbance, may contribute to mid-run losses for the stockholders.

Pair Trading with Aptus Collared and Anfield Universal

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

The idea behind Aptus Collared Income and Anfield Universal Fixed 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 Price Ceiling Movement module to calculate and plot Price Ceiling Movement for different equity instruments.