Correlation Between IShares Core and Anfield Equity

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

By analyzing existing cross correlation between iShares Core SP and Anfield Equity Sector, you can compare the effects of market volatilities on IShares Core and Anfield Equity 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 Core with a short position of Anfield Equity. Check out your portfolio center. Please also check ongoing floating volatility patterns of IShares Core and Anfield Equity.

Diversification Opportunities for IShares Core and Anfield Equity

0.99

Correlation Coefficient

IShares Core  Anfield Equity

No risk reduction

The 3 months correlation between IShares and Anfield is 0.99. Overlapping area represents the amount of risk that can be diversified away by holding iShares Core SP and Anfield Equity Sector in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Anfield Equity Sector and IShares Core 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 Core SP are associated (or correlated) with Anfield Equity. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Anfield Equity Sector has no effect on the direction of IShares Core i.e., IShares Core and Anfield Equity go up and down completely randomly.

Pair Corralation between IShares Core and Anfield Equity

Considering the 90-day investment horizon iShares Core SP is expected to generate 0.86 times more return on investment than Anfield Equity. However, iShares Core SP is 1.16 times less risky than Anfield Equity. It trades about 0.14 of its potential returns per unit of risk. Anfield Equity Sector is currently generating about 0.1 per unit of risk. If you would invest  56,455  in iShares Core SP on August 30, 2024 and sell it today you would earn a total of  3,727  from holding iShares Core SP or generate 6.6% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Very Strong
Accuracy	98.44%
Values	Daily Returns

iShares Core SP  vs.  Anfield Equity Sector

iShares Core SP

Risk-Adjusted Performance

10 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in iShares Core SP are ranked lower than 10 (%) of all global equities and portfolios over the last 90 days. In spite of fairly inconsistent basic indicators, IShares Core may actually be approaching a critical reversion point that can send shares even higher in December 2024.

Anfield Equity Sector

Risk-Adjusted Performance

8 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Anfield Equity Sector are ranked lower than 8 (%) of all global equities and portfolios over the last 90 days. Even with relatively invariable basic indicators, Anfield Equity is not utilizing all of its potentials. The current stock price agitation, may contribute to short-term losses for the retail investors.

Pair Trading with IShares Core and Anfield Equity

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

The idea behind iShares Core SP and Anfield Equity Sector 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 Portfolio File Import module to quickly import all of your third-party portfolios from your local drive in csv format.