Correlation Between Anfield Dynamic and First Trust

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

Diversification Opportunities for Anfield Dynamic and First Trust

0.85
  Correlation Coefficient

Very poor diversification

The 3 months correlation between Anfield and First is 0.85. Overlapping area represents the amount of risk that can be diversified away by holding Anfield Dynamic Fixed and First Trust Tcw in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on First Trust Tcw and Anfield Dynamic 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 Dynamic 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 Tcw has no effect on the direction of Anfield Dynamic i.e., Anfield Dynamic and First Trust go up and down completely randomly.

Pair Corralation between Anfield Dynamic and First Trust

Given the investment horizon of 90 days Anfield Dynamic Fixed is expected to generate 1.02 times more return on investment than First Trust. However, Anfield Dynamic is 1.02 times more volatile than First Trust Tcw. It trades about -0.04 of its potential returns per unit of risk. First Trust Tcw is currently generating about -0.11 per unit of risk. If you would invest  864.00  in Anfield Dynamic Fixed on September 1, 2022 and sell it today you would lose (24.00)  from holding Anfield Dynamic Fixed or give up 2.78% of portfolio value over 90 days.
Time Period3 Months [change]
DirectionMoves Together 
StrengthStrong
Accuracy100.0%
ValuesDaily Returns

Anfield Dynamic Fixed  vs.  First Trust Tcw

 Performance (%) 
       Timeline  
Anfield Dynamic Fixed 
Anfield Performance
0 of 100
Over the last 90 days Anfield Dynamic Fixed has generated negative risk-adjusted returns adding no value to investors with long positions. Despite nearly stable technical and fundamental indicators, Anfield Dynamic is not utilizing all of its potentials. The current stock price disturbance, may contribute to mid-run losses for the stockholders.

Anfield Price Channel

First Trust Tcw 
First Performance
0 of 100
Over the last 90 days First Trust Tcw has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of rather sound technical and fundamental indicators, First Trust is not utilizing all of its potentials. The current stock price tumult, may contribute to shorter-term losses for the shareholders.

First Price Channel

Anfield Dynamic and First Trust Volatility Contrast

   Predicted Return Density   
       Returns  

Pair Trading with Anfield Dynamic and First Trust

The main advantage of trading using opposite Anfield Dynamic and First Trust positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Anfield Dynamic 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 Dynamic vs. JPM Global Bond
The idea behind Anfield Dynamic Fixed and First Trust Tcw 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.
First Trust vs. JPM Global Bond
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 Stock Tickers module to use high-impact, comprehensive, and customizable stock tickers that can be easily integrated to any websites.

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