Correlation Between Inspire Global and Anfield Universal

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

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

Diversification Opportunities for Inspire Global and Anfield Universal

0.54

Correlation Coefficient

Inspire Global  Anfield Universal

Very weak diversification

The 3 months correlation between Inspire and Anfield is 0.54. Overlapping area represents the amount of risk that can be diversified away by holding Inspire Global Hope and Anfield Universal Fixed in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Anfield Universal Fixed and Inspire Global 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 Inspire Global Hope are associated (or correlated) with Anfield Universal. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Anfield Universal Fixed has no effect on the direction of Inspire Global i.e., Inspire Global and Anfield Universal go up and down completely randomly.

Pair Corralation between Inspire Global and Anfield Universal

Given the investment horizon of 90 days Inspire Global Hope is expected to generate 7.56 times more return on investment than Anfield Universal. However, Inspire Global is 7.56 times more volatile than Anfield Universal Fixed. It trades about 0.13 of its potential returns per unit of risk. Anfield Universal Fixed is currently generating about 0.21 per unit of risk. If you would invest  3,695  in Inspire Global Hope on September 2, 2024 and sell it today you would earn a total of  240.00  from holding Inspire Global Hope or generate 6.5% return on investment over 90 days.

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

Inspire Global Hope  vs.  Anfield Universal Fixed

Inspire Global Hope

Risk-Adjusted Performance

10 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Inspire Global Hope are ranked lower than 10 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively unsteady technical and fundamental indicators, Inspire Global may actually be approaching a critical reversion point that can send shares even higher in January 2025.

Anfield Universal Fixed

Risk-Adjusted Performance

16 of 100

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in Anfield Universal Fixed are ranked lower than 16 (%) of all global equities and portfolios over the last 90 days. Despite nearly stable forward indicators, Anfield Universal is not utilizing all of its potentials. The latest stock price disturbance, may contribute to mid-run losses for the stockholders.

Pair Trading with Inspire Global and Anfield Universal

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

The idea behind Inspire Global Hope and Anfield Universal 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 Options Analysis module to analyze and evaluate options and option chains as a potential hedge for your portfolios.