Correlation Between Formula Folios and Anfield Dynamic

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Can any of the company-specific risk be diversified away by investing in both Formula Folios 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 Formula Folios and Anfield Dynamic into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Formula Folios Income and Anfield Dynamic Fixed, you can compare the effects of market volatilities on Formula Folios 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 Formula Folios with a short position of Anfield Dynamic. Check out your portfolio center. Please also check ongoing floating volatility patterns of Formula Folios and Anfield Dynamic.

Diversification Opportunities for Formula Folios and Anfield Dynamic

0.95
  Correlation Coefficient

Almost no diversification

The 3 months correlation between Formula and Anfield is 0.95. Overlapping area represents the amount of risk that can be diversified away by holding Formula Folios Income 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 Formula Folios 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 Formula Folios Income 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 Formula Folios i.e., Formula Folios and Anfield Dynamic go up and down completely randomly.

Pair Corralation between Formula Folios and Anfield Dynamic

Given the investment horizon of 90 days Formula Folios Income is expected to generate 0.88 times more return on investment than Anfield Dynamic. However, Formula Folios Income is 1.14 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 -0.08 per unit of risk. If you would invest  2,313  in Formula Folios Income on August 28, 2022 and sell it today you would lose (263.00)  from holding Formula Folios Income or give up 11.37% of portfolio value over 90 days.
Time Period3 Months [change]
DirectionMoves Together 
StrengthVery Strong
Accuracy100.0%
ValuesDaily Returns

Formula Folios Income  vs.  Anfield Dynamic Fixed

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

Formula Price Channel

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

Formula Folios and Anfield Dynamic Volatility Contrast

   Predicted Return Density   
       Returns  

Pair Trading with Formula Folios and Anfield Dynamic

The main advantage of trading using opposite Formula Folios and Anfield Dynamic positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Formula Folios 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.
Formula Folios vs. ALPSSmith Credit Opportunities
The idea behind Formula Folios Income 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.
Anfield Dynamic vs. ALPSSmith Credit Opportunities
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 Insider Screener module to find insiders across different sectors to evaluate their impact on performance.

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