Correlation Between Anfield Equity and Cambria Value

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

Diversification Opportunities for Anfield Equity and Cambria Value

0.75

Correlation Coefficient

Anfield Equity  Cambria Value

Poor diversification

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

Pair Corralation between Anfield Equity and Cambria Value

Given the investment horizon of 90 days Anfield Equity Sector is expected to generate 1.38 times more return on investment than Cambria Value. However, Anfield Equity is 1.38 times more volatile than Cambria Value and. It trades about -0.05 of its potential returns per unit of risk. Cambria Value and is currently generating about -0.54 per unit of risk. If you would invest  1,778  in Anfield Equity Sector on September 29, 2024 and sell it today you would lose (21.00) from holding Anfield Equity Sector or give up 1.18% of portfolio value over 90 days.

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

Anfield Equity Sector  vs.  Cambria Value and

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 current stock price agitation, may contribute to short-term losses for the retail investors.

Cambria Value

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Cambria Value and has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of very healthy primary indicators, Cambria Value is not utilizing all of its potentials. The latest stock price disarray, may contribute to short-term losses for the investors.

Pair Trading with Anfield Equity and Cambria Value

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

The idea behind Anfield Equity Sector and Cambria Value and 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 Share Portfolio module to track or share privately all of your investments from the convenience of any device.