Correlation Between Anfield Universal and Six Circles

Can any of the company-specific risk be diversified away by investing in both Anfield Universal and Six Circles 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 Universal and Six Circles into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between Anfield Universal Fixed and Six Circles Managed, you can compare the effects of market volatilities on Anfield Universal and Six Circles 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 Universal with a short position of Six Circles. Check out your portfolio center. Please also check ongoing floating volatility patterns of Anfield Universal and Six Circles.

Diversification Opportunities for Anfield Universal and Six Circles

-0.56

Correlation Coefficient

Anfield Universal  Six Circles

Excellent diversification

The 3 months correlation between Anfield and Six is -0.56. Overlapping area represents the amount of risk that can be diversified away by holding Anfield Universal Fixed and Six Circles Managed in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Six Circles Managed and Anfield Universal 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 Universal Fixed are associated (or correlated) with Six Circles. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Six Circles Managed has no effect on the direction of Anfield Universal i.e., Anfield Universal and Six Circles go up and down completely randomly.

Pair Corralation between Anfield Universal and Six Circles

Assuming the 90 days horizon Anfield Universal Fixed is expected to generate 0.08 times more return on investment than Six Circles. However, Anfield Universal Fixed is 12.32 times less risky than Six Circles. It trades about 0.27 of its potential returns per unit of risk. Six Circles Managed is currently generating about -0.07 per unit of risk. If you would invest  861.00  in Anfield Universal Fixed on December 28, 2024 and sell it today you would earn a total of  12.00  from holding Anfield Universal Fixed or generate 1.39% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Very Weak
Accuracy	100.0%
Values	Daily Returns

Anfield Universal Fixed  vs.  Six Circles Managed

Anfield Universal Fixed

Risk-Adjusted Performance

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in Anfield Universal Fixed are ranked lower than 20 (%) of all funds and portfolios of funds over the last 90 days. In spite of fairly strong forward indicators, Anfield Universal is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

Six Circles Managed

Risk-Adjusted Performance

Very Weak

Over the last 90 days Six Circles Managed has generated negative risk-adjusted returns adding no value to fund investors. In spite of fairly strong basic indicators, Six Circles is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

Pair Trading with Anfield Universal and Six Circles

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

The idea behind Anfield Universal Fixed and Six Circles Managed 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 Economic Indicators module to top statistical indicators that provide insights into how an economy is performing.