Correlation Between Anfield Dynamic and Northern Lights

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Can any of the company-specific risk be diversified away by investing in both Anfield Dynamic and Northern Lights 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 Northern Lights 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 Northern Lights, you can compare the effects of market volatilities on Anfield Dynamic and Northern Lights 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 Northern Lights. Check out your portfolio center. Please also check ongoing floating volatility patterns of Anfield Dynamic and Northern Lights.

Diversification Opportunities for Anfield Dynamic and Northern Lights

0.9
  Correlation Coefficient

Almost no diversification

The 3 months correlation between Anfield and Northern is 0.9. Overlapping area represents the amount of risk that can be diversified away by holding Anfield Dynamic Fixed and Northern Lights in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Northern Lights 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 Northern Lights. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Northern Lights has no effect on the direction of Anfield Dynamic i.e., Anfield Dynamic and Northern Lights go up and down completely randomly.

Pair Corralation between Anfield Dynamic and Northern Lights

Given the investment horizon of 90 days Anfield Dynamic Fixed is expected to generate 1.35 times more return on investment than Northern Lights. However, Anfield Dynamic is 1.35 times more volatile than Northern Lights. It trades about 0.37 of its potential returns per unit of risk. Northern Lights is currently generating about 0.38 per unit of risk. If you would invest  814.00  in Anfield Dynamic Fixed on September 10, 2022 and sell it today you would earn a total of  39.00  from holding Anfield Dynamic Fixed or generate 4.79% return on investment over 90 days.
Time Period3 Months [change]
DirectionMoves Together 
StrengthVery Strong
Accuracy95.45%
ValuesDaily Returns

Anfield Dynamic Fixed  vs.  Northern Lights

 Performance (%) 
       Timeline  
Anfield Dynamic Fixed 
Anfield Performance
2 of 100
Compared to the overall equity markets, risk-adjusted returns on investments in Anfield Dynamic Fixed are ranked lower than 2 (%) of all global equities and portfolios over the last 90 days. Despite nearly stable technical and fundamental indicators, Anfield Dynamic is not utilizing all of its potentials. The latest stock price disturbance, may contribute to mid-run losses for the stockholders.

Anfield Price Channel

Northern Lights 
Northern Performance
0 of 100
Over the last 90 days Northern Lights has generated negative risk-adjusted returns adding no value to investors with long positions. Despite nearly stable basic indicators, Northern Lights is not utilizing all of its potentials. The latest stock price disturbance, may contribute to mid-run losses for the stockholders.

Northern Price Channel

Anfield Dynamic and Northern Lights Volatility Contrast

   Predicted Return Density   
       Returns  

Pair Trading with Anfield Dynamic and Northern Lights

The main advantage of trading using opposite Anfield Dynamic and Northern Lights positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Anfield Dynamic position performs unexpectedly, Northern Lights 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 Northern Lights will offset losses from the drop in Northern Lights' long position.
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Anfield Dynamic vs. FT Cboe Vest
The idea behind Anfield Dynamic Fixed and Northern Lights 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.
Northern Lights vs. Home Depot
Northern Lights vs. Mitsubishi UFJ Financial
Northern Lights vs. Indocan Resources
Northern Lights vs. FT Cboe Vest
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 Pattern Recognition module to use different Pattern Recognition models to time the market across multiple global exchanges.

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