Correlation Between Anfield Equity and Aptus Drawdown

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

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

Diversification Opportunities for Anfield Equity and Aptus Drawdown

0.99

Correlation Coefficient

Anfield Equity  Aptus Drawdown

No risk reduction

The 3 months correlation between Anfield and Aptus is 0.99. Overlapping area represents the amount of risk that can be diversified away by holding Anfield Equity Sector and Aptus Drawdown Managed in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Aptus Drawdown Managed and Anfield Equity 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 Equity Sector are associated (or correlated) with Aptus Drawdown. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Aptus Drawdown Managed has no effect on the direction of Anfield Equity i.e., Anfield Equity and Aptus Drawdown go up and down completely randomly.

Pair Corralation between Anfield Equity and Aptus Drawdown

Given the investment horizon of 90 days Anfield Equity Sector is expected to generate 1.31 times more return on investment than Aptus Drawdown. However, Anfield Equity is 1.31 times more volatile than Aptus Drawdown Managed. It trades about 0.15 of its potential returns per unit of risk. Aptus Drawdown Managed is currently generating about 0.16 per unit of risk. If you would invest  1,655  in Anfield Equity Sector on September 17, 2024 and sell it today you would earn a total of  129.00  from holding Anfield Equity Sector or generate 7.79% return on investment over 90 days.

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

Anfield Equity Sector  vs.  Aptus Drawdown Managed

Anfield Equity Sector

Risk-Adjusted Performance

11 of 100

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Anfield Equity Sector are ranked lower than 11 (%) of all global equities and portfolios over the last 90 days. Even with relatively fragile basic indicators, Anfield Equity may actually be approaching a critical reversion point that can send shares even higher in January 2025.

Aptus Drawdown Managed

Risk-Adjusted Performance

12 of 100

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Aptus Drawdown Managed are ranked lower than 12 (%) of all global equities and portfolios over the last 90 days. In spite of rather sound primary indicators, Aptus Drawdown is not utilizing all of its potentials. The recent stock price tumult, may contribute to shorter-term losses for the shareholders.

Pair Trading with Anfield Equity and Aptus Drawdown

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

The idea behind Anfield Equity Sector and Aptus Drawdown Managed 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.