Correlation Between Anfield Equity and DUDE

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

Diversification Opportunities for Anfield Equity and DUDE

0.76

Correlation Coefficient

Anfield Equity  DUDE

Poor diversification

The 3 months correlation between Anfield and DUDE is 0.76. Overlapping area represents the amount of risk that can be diversified away by holding Anfield Equity Sector and DUDE in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on DUDE 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 DUDE. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of DUDE has no effect on the direction of Anfield Equity i.e., Anfield Equity and DUDE go up and down completely randomly.

Pair Corralation between Anfield Equity and DUDE

If you would invest  1,744  in Anfield Equity Sector on September 21, 2024 and sell it today you would earn a total of  17.00  from holding Anfield Equity Sector or generate 0.97% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Significant
Accuracy	4.55%
Values	Daily Returns

Anfield Equity Sector  vs.  DUDE

Anfield Equity Sector

Risk-Adjusted Performance

4 of 100

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in Anfield Equity Sector are ranked lower than 4 (%) 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 latest stock price agitation, may contribute to short-term losses for the retail investors.

DUDE

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days DUDE has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of rather sound fundamental indicators, DUDE is not utilizing all of its potentials. The latest stock price tumult, may contribute to shorter-term losses for the shareholders.

Pair Trading with Anfield Equity and DUDE

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

The idea behind Anfield Equity Sector and DUDE 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 Theme Ratings module to determine theme ratings based on digital equity recommendations. Macroaxis theme ratings are based on combination of fundamental analysis and risk-adjusted market performance.