Correlation Between Anfield Equity and FFSG

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

Diversification Opportunities for Anfield Equity and FFSG

0.75

Correlation Coefficient

Anfield Equity  FFSG

Poor diversification

The 3 months correlation between Anfield and FFSG is 0.75. Overlapping area represents the amount of risk that can be diversified away by holding Anfield Equity Sector and FFSG in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on FFSG 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 FFSG. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of FFSG has no effect on the direction of Anfield Equity i.e., Anfield Equity and FFSG go up and down completely randomly.

Pair Corralation between Anfield Equity and FFSG

If you would invest  1,657  in Anfield Equity Sector on September 13, 2024 and sell it today you would earn a total of  138.00  from holding Anfield Equity Sector or generate 8.33% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Significant
Accuracy	1.59%
Values	Daily Returns

Anfield Equity Sector  vs.  FFSG

Anfield Equity Sector

Risk-Adjusted Performance

12 of 100

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Anfield Equity Sector are ranked lower than 12 (%) 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.

FFSG

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days FFSG has generated negative risk-adjusted returns adding no value to investors with long positions. Despite nearly stable basic indicators, FFSG is not utilizing all of its potentials. The current stock price disturbance, may contribute to mid-run losses for the stockholders.

Pair Trading with Anfield Equity and FFSG

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

The idea behind Anfield Equity Sector and FFSG 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 Stock Screener module to find equities using a custom stock filter or screen asymmetry in trading patterns, price, volume, or investment outlook..