Correlation Between Anfield Equity and American Century

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

Diversification Opportunities for Anfield Equity and American Century

0.16

Correlation Coefficient

Anfield Equity  American Century

Average diversification

The 3 months correlation between Anfield and American is 0.16. Overlapping area represents the amount of risk that can be diversified away by holding Anfield Equity Sector and American Century ETF in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on American Century ETF 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 American Century. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of American Century ETF has no effect on the direction of Anfield Equity i.e., Anfield Equity and American Century go up and down completely randomly.

Pair Corralation between Anfield Equity and American Century

Given the investment horizon of 90 days Anfield Equity Sector is expected to under-perform the American Century. In addition to that, Anfield Equity is 1.49 times more volatile than American Century ETF. It trades about -0.06 of its total potential returns per unit of risk. American Century ETF is currently generating about 0.11 per unit of volatility. If you would invest  6,659  in American Century ETF on December 20, 2024 and sell it today you would earn a total of  354.00  from holding American Century ETF or generate 5.32% return on investment over 90 days.

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

Anfield Equity Sector  vs.  American Century ETF

Anfield Equity Sector

Risk-Adjusted Performance

Very Weak

Over the last 90 days Anfield Equity Sector has generated negative risk-adjusted returns adding no value to investors with long positions. Even with relatively invariable basic indicators, Anfield Equity is not utilizing all of its potentials. The current stock price agitation, may contribute to short-term losses for the retail investors.

American Century ETF

Risk-Adjusted Performance

OK

Compared to the overall equity markets, risk-adjusted returns on investments in American Century ETF are ranked lower than 8 (%) of all global equities and portfolios over the last 90 days. In spite of fairly stable essential indicators, American Century is not utilizing all of its potentials. The latest stock price fuss, may contribute to near-short-term losses for the sophisticated investors.

Pair Trading with Anfield Equity and American Century

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

The idea behind Anfield Equity Sector and American Century ETF 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 Portfolio Volatility module to check portfolio volatility and analyze historical return density to properly model market risk.