Correlation Between Anfield Equity and Aptus Defined

Can any of the company-specific risk be diversified away by investing in both Anfield Equity and Aptus Defined 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 Defined 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 Defined Risk, you can compare the effects of market volatilities on Anfield Equity and Aptus Defined 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 Defined. Check out your portfolio center. Please also check ongoing floating volatility patterns of Anfield Equity and Aptus Defined.

Diversification Opportunities for Anfield Equity and Aptus Defined

-0.06

Correlation Coefficient

Anfield Equity  Aptus Defined

Good diversification

The 3 months correlation between Anfield and Aptus is -0.06. Overlapping area represents the amount of risk that can be diversified away by holding Anfield Equity Sector and Aptus Defined Risk in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Aptus Defined Risk 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 Defined. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Aptus Defined Risk has no effect on the direction of Anfield Equity i.e., Anfield Equity and Aptus Defined go up and down completely randomly.

Pair Corralation between Anfield Equity and Aptus Defined

Given the investment horizon of 90 days Anfield Equity Sector is expected to under-perform the Aptus Defined. In addition to that, Anfield Equity is 1.56 times more volatile than Aptus Defined Risk. It trades about -0.04 of its total potential returns per unit of risk. Aptus Defined Risk is currently generating about 0.12 per unit of volatility. If you would invest  2,762  in Aptus Defined Risk on September 23, 2024 and sell it today you would earn a total of  42.00  from holding Aptus Defined Risk or generate 1.52% return on investment over 90 days.

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

Anfield Equity Sector  vs.  Aptus Defined Risk

Anfield Equity Sector

Risk-Adjusted Performance

5 of 100

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in Anfield Equity Sector are ranked lower than 5 (%) of all global equities and portfolios over the last 90 days. Even with relatively invariable basic indicators, Anfield Equity is not utilizing all of its potentials. The recent stock price agitation, may contribute to short-term losses for the retail investors.

Aptus Defined Risk

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Aptus Defined Risk has generated negative risk-adjusted returns adding no value to investors with long positions. Despite quite persistent basic indicators, Aptus Defined is not utilizing all of its potentials. The latest stock price mess, may contribute to short-term losses for the institutional investors.

Pair Trading with Anfield Equity and Aptus Defined

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

The idea behind Anfield Equity Sector and Aptus Defined Risk 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 Transformation module to use Price Transformation models to analyze the depth of different equity instruments across global markets.