Correlation Between Anfield Equity and Starboard Investment

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

Diversification Opportunities for Anfield Equity and Starboard Investment

0.76

Correlation Coefficient

Anfield Equity  Starboard Investment

Poor diversification

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

Pair Corralation between Anfield Equity and Starboard Investment

Given the investment horizon of 90 days Anfield Equity is expected to generate 1.04 times less return on investment than Starboard Investment. In addition to that, Anfield Equity is 1.04 times more volatile than Starboard Investment Trust. It trades about 0.17 of its total potential returns per unit of risk. Starboard Investment Trust is currently generating about 0.19 per unit of volatility. If you would invest  1,559  in Starboard Investment Trust on September 12, 2024 and sell it today you would earn a total of  143.44  from holding Starboard Investment Trust or generate 9.2% return on investment over 90 days.

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

Anfield Equity Sector  vs.  Starboard Investment Trust

Anfield Equity Sector

Risk-Adjusted Performance

13 of 100

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Anfield Equity Sector are ranked lower than 13 (%) 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.

Starboard Investment

Risk-Adjusted Performance

14 of 100

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Starboard Investment Trust are ranked lower than 14 (%) of all global equities and portfolios over the last 90 days. In spite of fairly weak basic indicators, Starboard Investment may actually be approaching a critical reversion point that can send shares even higher in January 2025.

Pair Trading with Anfield Equity and Starboard Investment

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

The idea behind Anfield Equity Sector and Starboard Investment Trust 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 Alpha Finder module to use alpha and beta coefficients to find investment opportunities after accounting for the risk.