Correlation Between Anfield Equity and Franklin Liberty
Can any of the company-specific risk be diversified away by investing in both Anfield Equity and Franklin Liberty 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 Franklin Liberty 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 Franklin Liberty Systematic, you can compare the effects of market volatilities on Anfield Equity and Franklin Liberty 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 Franklin Liberty. Check out your portfolio center. Please also check ongoing floating volatility patterns of Anfield Equity and Franklin Liberty.
Diversification Opportunities for Anfield Equity and Franklin Liberty
0.49 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Anfield and Franklin is 0.49. Overlapping area represents the amount of risk that can be diversified away by holding Anfield Equity Sector and Franklin Liberty Systematic in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Franklin Liberty Sys 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 Franklin Liberty. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Franklin Liberty Sys has no effect on the direction of Anfield Equity i.e., Anfield Equity and Franklin Liberty go up and down completely randomly.
Pair Corralation between Anfield Equity and Franklin Liberty
Given the investment horizon of 90 days Anfield Equity Sector is expected to generate 1.37 times more return on investment than Franklin Liberty. However, Anfield Equity is 1.37 times more volatile than Franklin Liberty Systematic. It trades about 0.16 of its potential returns per unit of risk. Franklin Liberty Systematic is currently generating about 0.06 per unit of risk. If you would invest 1,720 in Anfield Equity Sector on August 29, 2024 and sell it today you would earn a total of 57.00 from holding Anfield Equity Sector or generate 3.31% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Anfield Equity Sector vs. Franklin Liberty Systematic
Performance |
| Timeline |
| Anfield Equity Sector |
| Franklin Liberty Sys |
Anfield Equity and Franklin Liberty Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Anfield Equity and Franklin Liberty
The main advantage of trading using opposite Anfield Equity and Franklin Liberty positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Anfield Equity position performs unexpectedly, Franklin Liberty 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 Franklin Liberty will offset losses from the drop in Franklin Liberty's long position.| Anfield Equity vs. Anfield Universal Fixed | Anfield Equity vs. Aptus Drawdown Managed | Anfield Equity vs. Absolute Core Strategy | Anfield Equity vs. FT Cboe Vest |
| Franklin Liberty vs. Anfield Universal Fixed | Franklin Liberty vs. Anfield Equity Sector | Franklin Liberty vs. Aquagold International | Franklin Liberty vs. Morningstar Unconstrained Allocation |
Check out your portfolio center.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 Aroon Oscillator module to analyze current equity momentum using Aroon Oscillator and other momentum ratios.
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