Correlation Between Anfield Dynamic and IShares Core

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

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

Diversification Opportunities for Anfield Dynamic and IShares Core

0.94

Correlation Coefficient

Anfield Dynamic  IShares Core

Almost no diversification

The 3 months correlation between Anfield and IShares is 0.94. Overlapping area represents the amount of risk that can be diversified away by holding Anfield Dynamic Fixed and iShares Core Total in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on iShares Core Total and Anfield Dynamic 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 Anfield Dynamic Fixed are associated (or correlated) with IShares Core. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of iShares Core Total has no effect on the direction of Anfield Dynamic i.e., Anfield Dynamic and IShares Core go up and down completely randomly.

Pair Corralation between Anfield Dynamic and IShares Core

Given the investment horizon of 90 days Anfield Dynamic Fixed is expected to under-perform the IShares Core. In addition to that, Anfield Dynamic is 1.65 times more volatile than iShares Core Total. It trades about -0.1 of its total potential returns per unit of risk. iShares Core Total is currently generating about -0.08 per unit of volatility. If you would invest  4,680  in iShares Core Total on September 13, 2024 and sell it today you would lose (70.00) from holding iShares Core Total or give up 1.5% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Very Strong
Accuracy	98.44%
Values	Daily Returns

Anfield Dynamic Fixed  vs.  iShares Core Total

Anfield Dynamic Fixed

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Anfield Dynamic Fixed has generated negative risk-adjusted returns adding no value to investors with long positions. Despite fairly strong technical and fundamental indicators, Anfield Dynamic is not utilizing all of its potentials. The current stock price confusion, may contribute to short-horizon losses for the traders.

iShares Core Total

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days iShares Core Total has generated negative risk-adjusted returns adding no value to investors with long positions. Despite somewhat strong basic indicators, IShares Core is not utilizing all of its potentials. The latest stock price disturbance, may contribute to short-term losses for the investors.

Pair Trading with Anfield Dynamic and IShares Core

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

The idea behind Anfield Dynamic Fixed and iShares Core Total 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 Alpha Finder module to use alpha and beta coefficients to find investment opportunities after accounting for the risk.