Correlation Between Aniplus and GiantStep

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

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

Diversification Opportunities for Aniplus and GiantStep

0.76

Correlation Coefficient

Aniplus  GiantStep

Poor diversification

The 3 months correlation between Aniplus and GiantStep is 0.76. Overlapping area represents the amount of risk that can be diversified away by holding Aniplus and GiantStep Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on GiantStep and Aniplus 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 Aniplus are associated (or correlated) with GiantStep. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of GiantStep has no effect on the direction of Aniplus i.e., Aniplus and GiantStep go up and down completely randomly.

Pair Corralation between Aniplus and GiantStep

Assuming the 90 days trading horizon Aniplus is expected to generate 0.64 times more return on investment than GiantStep. However, Aniplus is 1.57 times less risky than GiantStep. It trades about 0.02 of its potential returns per unit of risk. GiantStep Co is currently generating about 0.0 per unit of risk. If you would invest  265,500  in Aniplus on October 25, 2024 and sell it today you would earn a total of  3,500  from holding Aniplus or generate 1.32% return on investment over 90 days.

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

Aniplus  vs.  GiantStep Co

Aniplus

Risk-Adjusted Performance

1 of 100

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in Aniplus are ranked lower than 1 (%) of all global equities and portfolios over the last 90 days. Despite somewhat strong basic indicators, Aniplus is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

GiantStep

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days GiantStep Co has generated negative risk-adjusted returns adding no value to investors with long positions. Despite somewhat strong basic indicators, GiantStep is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

Pair Trading with Aniplus and GiantStep

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

The idea behind Aniplus and GiantStep Co 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 Pair Correlation module to compare performance and examine fundamental relationship between any two equity instruments.