Subdomain help

Good morning all,

I have two wordpress sites running on the same domain. My main domain is

domain.com and the wordpress core files are installed in
domain.com/wordpress and the second site (Another install) is installed under domain.com/anotherdomain and they both have their own databases.

Currently, if you navigate in the browser to either domain.com or domain.com/anotherdomain it all works lovely.

However – how do I set up the second site so you can access it by navigating to

anotherdomain.domain.com

I have set up the DNS settings to allow this and if you ping anotherdomain/domain.com it shows the correct IP address of the server, but when you navigate to that address you receive the error
‘The site you requested does not exist on this server’

I assume this is an issue with the index.php or .htaccess file that is held in the root of server as I think I must be missing that vital bit of code.

Any help would be appreciated!

Many thanks