Correlation Between FFHG and Anfield Equity

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

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

Diversification Opportunities for FFHG and Anfield Equity

0.71

Correlation Coefficient

FFHG  Anfield Equity

Poor diversification

The 3 months correlation between FFHG and Anfield is 0.71. Overlapping area represents the amount of risk that can be diversified away by holding FFHG and Anfield Equity Sector in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Anfield Equity Sector and FFHG 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 FFHG are associated (or correlated) with Anfield Equity. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Anfield Equity Sector has no effect on the direction of FFHG i.e., FFHG and Anfield Equity go up and down completely randomly.

Pair Corralation between FFHG and Anfield Equity

If you would invest  1,543  in Anfield Equity Sector on September 5, 2024 and sell it today you would earn a total of  251.00  from holding Anfield Equity Sector or generate 16.27% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Significant
Accuracy	1.18%
Values	Daily Returns

FFHG  vs.  Anfield Equity Sector

FFHG

Risk-Adjusted Performance

0 of 100

Very Weak

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

Anfield Equity Sector

Risk-Adjusted Performance

16 of 100

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in Anfield Equity Sector are ranked lower than 16 (%) 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.

Pair Trading with FFHG and Anfield Equity

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

The idea behind FFHG and Anfield Equity Sector 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 Manager module to state of the art Portfolio Manager to monitor and improve performance of your invested capital.