Correlation Between First Trust and Anfield Dynamic
Can any of the company-specific risk be diversified away by investing in both First Trust 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 First Trust and Anfield Dynamic into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between First Trust Managed and Anfield Dynamic Fixed, you can compare the effects of market volatilities on First Trust 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 First Trust with a short position of Anfield Dynamic. Check out your portfolio center. Please also check ongoing floating volatility patterns of First Trust and Anfield Dynamic.
Diversification Opportunities for First Trust and Anfield Dynamic
0.74 | Correlation Coefficient |
Poor diversification
The 3 months correlation between First and Anfield is 0.74. Overlapping area represents the amount of risk that can be diversified away by holding First Trust Managed 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 First Trust 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 First Trust Managed 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 First Trust i.e., First Trust and Anfield Dynamic go up and down completely randomly.
Pair Corralation between First Trust and Anfield Dynamic
Considering the 90-day investment horizon First Trust Managed is expected to generate 0.68 times more return on investment than Anfield Dynamic. However, First Trust Managed is 1.48 times less risky than Anfield Dynamic. It trades about 0.13 of its potential returns per unit of risk. Anfield Dynamic Fixed is currently generating about 0.02 per unit of risk. If you would invest 5,113 in First Trust Managed on August 30, 2024 and sell it today you would earn a total of 53.00 from holding First Trust Managed or generate 1.04% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
First Trust Managed vs. Anfield Dynamic Fixed
Performance |
| Timeline |
| First Trust Managed |
| Anfield Dynamic Fixed |
First Trust and Anfield Dynamic Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with First Trust and Anfield Dynamic
The main advantage of trading using opposite First Trust and Anfield Dynamic positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if First Trust 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.| First Trust vs. First Trust Low | First Trust vs. First Trust Enhanced | First Trust vs. First Trust Senior | First Trust vs. First Trust TCW |
| Anfield Dynamic vs. Anfield Equity Sector | Anfield Dynamic vs. Aptus Drawdown Managed | Anfield Dynamic vs. Anfield Universal Fixed | Anfield Dynamic vs. Aptus Collared Income |
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 Correlation Analysis module to reduce portfolio risk simply by holding instruments which are not perfectly correlated.
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