Correlation Between Anfield Capital and Malaga Financial

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

By analyzing existing cross correlation between Anfield Capital Diversified and Malaga Financial, you can compare the effects of market volatilities on Anfield Capital and Malaga Financial 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 Capital with a short position of Malaga Financial. Check out your portfolio center. Please also check ongoing floating volatility patterns of Anfield Capital and Malaga Financial.

Diversification Opportunities for Anfield Capital and Malaga Financial

-0.66

Correlation Coefficient

Anfield Capital  Malaga Financial

Excellent diversification

The 3 months correlation between Anfield and Malaga is -0.66. Overlapping area represents the amount of risk that can be diversified away by holding Anfield Capital Diversified and Malaga Financial in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Malaga Financial and Anfield Capital 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 Capital Diversified are associated (or correlated) with Malaga Financial. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Malaga Financial has no effect on the direction of Anfield Capital i.e., Anfield Capital and Malaga Financial go up and down completely randomly.

Pair Corralation between Anfield Capital and Malaga Financial

Given the investment horizon of 90 days Anfield Capital is expected to generate 17.31 times less return on investment than Malaga Financial. But when comparing it to its historical volatility, Anfield Capital Diversified is 4.09 times less risky than Malaga Financial. It trades about 0.01 of its potential returns per unit of risk. Malaga Financial is currently generating about 0.02 of returns per unit of risk over similar time horizon. If you would invest  2,109  in Malaga Financial on January 19, 2024 and sell it today you would earn a total of  141.00  from holding Malaga Financial or generate 6.69% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Weak
Accuracy	86.67%
Values	Daily Returns

Anfield Capital Diversified  vs.  Malaga Financial

Anfield Capital Dive

Risk-Adjusted Performance

11 of 100

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Anfield Capital Diversified are ranked lower than 11 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively stable essential indicators, Anfield Capital is not utilizing all of its potentials. The latest stock price uproar, may contribute to short-horizon losses for the private investors.

Malaga Financial

Risk-Adjusted Performance

0 of 100

Very Weak

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

Pair Trading with Anfield Capital and Malaga Financial

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

The idea behind Anfield Capital Diversified and Malaga Financial 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 Equity Forecasting module to use basic forecasting models to generate price predictions and determine price momentum.