Correlation Between IShares Core and Anfield Dynamic

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

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

Diversification Opportunities for IShares Core and Anfield Dynamic

0.94

Correlation Coefficient

IShares Core  Anfield Dynamic

Almost no diversification

The 3 months correlation between IShares and Anfield is 0.94. Overlapping area represents the amount of risk that can be diversified away by holding iShares Core Total and Anfield Dynamic Fixed in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Anfield Dynamic Fixed and IShares Core 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 iShares Core Total are associated (or correlated) with Anfield Dynamic. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Anfield Dynamic Fixed has no effect on the direction of IShares Core i.e., IShares Core and Anfield Dynamic go up and down completely randomly.

Pair Corralation between IShares Core and Anfield Dynamic

Given the investment horizon of 90 days iShares Core Total is expected to generate 0.68 times more return on investment than Anfield Dynamic. However, iShares Core Total is 1.46 times less risky than Anfield Dynamic. It trades about 0.14 of its potential returns per unit of risk. Anfield Dynamic Fixed is currently generating about 0.07 per unit of risk. If you would invest  4,493  in iShares Core Total on December 29, 2024 and sell it today you would earn a total of  105.00  from holding iShares Core Total or generate 2.34% return on investment over 90 days.

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

iShares Core Total  vs.  Anfield Dynamic Fixed

iShares Core Total

Risk-Adjusted Performance

OK

Compared to the overall equity markets, risk-adjusted returns on investments in iShares Core Total are ranked lower than 10 (%) of all global equities and portfolios over the last 90 days. Despite somewhat strong basic indicators, IShares Core is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

Anfield Dynamic Fixed

Risk-Adjusted Performance

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in Anfield Dynamic Fixed are ranked lower than 5 (%) of all global equities and portfolios over the last 90 days. Despite fairly strong technical and fundamental indicators, Anfield Dynamic is not utilizing all of its potentials. The latest stock price confusion, may contribute to short-horizon losses for the traders.

Pair Trading with IShares Core and Anfield Dynamic

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

The idea behind iShares Core Total and Anfield Dynamic Fixed 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 Sectors module to list of equity sectors categorizing publicly traded companies based on their primary business activities.