Correlation Between IShares 1 and Anfield Dynamic

Can any of the company-specific risk be diversified away by investing in both IShares 1 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 1 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 1 5 Year and Anfield Dynamic Fixed, you can compare the effects of market volatilities on IShares 1 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 1 with a short position of Anfield Dynamic. Check out your portfolio center. Please also check ongoing floating volatility patterns of IShares 1 and Anfield Dynamic.

Diversification Opportunities for IShares 1 and Anfield Dynamic

0.83

Correlation Coefficient

IShares 1  Anfield Dynamic

Very poor diversification

The 3 months correlation between IShares and Anfield is 0.83. Overlapping area represents the amount of risk that can be diversified away by holding iShares 1 5 Year 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 1 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 1 5 Year 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 1 i.e., IShares 1 and Anfield Dynamic go up and down completely randomly.

Pair Corralation between IShares 1 and Anfield Dynamic

Given the investment horizon of 90 days IShares 1 is expected to generate 4.45 times less return on investment than Anfield Dynamic. But when comparing it to its historical volatility, iShares 1 5 Year is 3.08 times less risky than Anfield Dynamic. It trades about 0.07 of its potential returns per unit of risk. Anfield Dynamic Fixed is currently generating about 0.1 of returns per unit of risk over similar time horizon. If you would invest  853.00  in Anfield Dynamic Fixed on September 4, 2024 and sell it today you would earn a total of  9.00  from holding Anfield Dynamic Fixed or generate 1.06% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Strong
Accuracy	95.24%
Values	Daily Returns

iShares 1 5 Year  vs.  Anfield Dynamic Fixed

iShares 1 5

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days iShares 1 5 Year has generated negative risk-adjusted returns adding no value to investors with long positions. Despite somewhat strong basic indicators, IShares 1 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

0 of 100

Very Weak

Over the last 90 days Anfield Dynamic Fixed has generated negative risk-adjusted returns adding no value to investors with long positions. Despite fairly strong technical and fundamental indicators, Anfield Dynamic is not utilizing all of its potentials. The current stock price confusion, may contribute to short-horizon losses for the traders.

Pair Trading with IShares 1 and Anfield Dynamic

The main advantage of trading using opposite IShares 1 and Anfield Dynamic positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if IShares 1 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 1 5 Year 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 Crypto Correlations module to use cryptocurrency correlation module to diversify your cryptocurrency portfolio across multiple coins.