Correlation Between Anfield Universal and First Trust
Can any of the company-specific risk be diversified away by investing in both Anfield Universal and First Trust 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 First Trust 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 First Trust Active, you can compare the effects of market volatilities on Anfield Universal and First Trust 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 First Trust. Check out your portfolio center. Please also check ongoing floating volatility patterns of Anfield Universal and First Trust.
Diversification Opportunities for Anfield Universal and First Trust
0.47 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Anfield and First is 0.47. Overlapping area represents the amount of risk that can be diversified away by holding Anfield Universal Fixed and First Trust Active in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on First Trust Active 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 First Trust. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of First Trust Active has no effect on the direction of Anfield Universal i.e., Anfield Universal and First Trust go up and down completely randomly.
Pair Corralation between Anfield Universal and First Trust
Given the investment horizon of 90 days Anfield Universal is expected to generate 1.11 times less return on investment than First Trust. But when comparing it to its historical volatility, Anfield Universal Fixed is 6.01 times less risky than First Trust. It trades about 0.16 of its potential returns per unit of risk. First Trust Active is currently generating about 0.03 of returns per unit of risk over similar time horizon. If you would invest 3,504 in First Trust Active on October 20, 2024 and sell it today you would earn a total of 30.00 from holding First Trust Active or generate 0.86% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Anfield Universal Fixed vs. First Trust Active
Performance |
| Timeline |
| Anfield Universal Fixed |
| First Trust Active |
Anfield Universal and First Trust Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Anfield Universal and First Trust
The main advantage of trading using opposite Anfield Universal and First Trust positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Anfield Universal position performs unexpectedly, First Trust 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 First Trust will offset losses from the drop in First Trust's long position.| Anfield Universal vs. FlexShares Core Select | Anfield Universal vs. Anfield Equity Sector | Anfield Universal vs. WisdomTree Interest Rate |
| First Trust vs. First Trust Active | First Trust vs. First Trust Active | First Trust vs. Absolute Core Strategy | First Trust vs. Anfield Equity Sector |
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 Pair Correlation module to compare performance and examine fundamental relationship between any two equity instruments.
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