Correlation Between Anchor Risk and Anchor Tactical

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

By analyzing existing cross correlation between Anchor Risk Managed and Anchor Tactical Credit, you can compare the effects of market volatilities on Anchor Risk and Anchor Tactical 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 Anchor Risk with a short position of Anchor Tactical. Check out your portfolio center. Please also check ongoing floating volatility patterns of Anchor Risk and Anchor Tactical.

Diversification Opportunities for Anchor Risk and Anchor Tactical

0.98

Correlation Coefficient

Anchor Risk  Anchor Tactical

Almost no diversification

The 3 months correlation between Anchor and Anchor is 0.98. Overlapping area represents the amount of risk that can be diversified away by holding Anchor Risk Managed and Anchor Tactical Credit in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Anchor Tactical Credit and Anchor Risk 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 Anchor Risk Managed are associated (or correlated) with Anchor Tactical. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Anchor Tactical Credit has no effect on the direction of Anchor Risk i.e., Anchor Risk and Anchor Tactical go up and down completely randomly.

Pair Corralation between Anchor Risk and Anchor Tactical

Assuming the 90 days horizon Anchor Risk Managed is expected to generate 1.7 times more return on investment than Anchor Tactical. However, Anchor Risk is 1.7 times more volatile than Anchor Tactical Credit. It trades about 0.22 of its potential returns per unit of risk. Anchor Tactical Credit is currently generating about 0.25 per unit of risk. If you would invest  1,438  in Anchor Risk Managed on May 11, 2025 and sell it today you would earn a total of  109.00  from holding Anchor Risk Managed or generate 7.58% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Very Strong
Accuracy	100.0%
Values	Daily Returns

Anchor Risk Managed  vs.  Anchor Tactical Credit

Anchor Risk Managed

Risk-Adjusted Performance

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in Anchor Risk Managed are ranked lower than 17 (%) of all funds and portfolios of funds over the last 90 days. In spite of fairly weak basic indicators, Anchor Risk may actually be approaching a critical reversion point that can send shares even higher in September 2025.

Anchor Tactical Credit

Risk-Adjusted Performance

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in Anchor Tactical Credit are ranked lower than 19 (%) of all funds and portfolios of funds over the last 90 days. In spite of fairly strong basic indicators, Anchor Tactical is not utilizing all of its potentials. The recent stock price disturbance, may contribute to short-term losses for the investors.

Pair Trading with Anchor Risk and Anchor Tactical

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

The idea behind Anchor Risk Managed and Anchor Tactical Credit 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 Economic Indicators module to top statistical indicators that provide insights into how an economy is performing.