Correlation Between Anji Foodstuff and Lander Sports

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

Diversification Opportunities for Anji Foodstuff and Lander Sports

0.79
  Correlation Coefficient

Poor diversification

The 3 months correlation between Anji and Lander is 0.79. Overlapping area represents the amount of risk that can be diversified away by holding Anji Foodstuff Co and Lander Sports Development in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Lander Sports Development and Anji Foodstuff 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 Anji Foodstuff Co are associated (or correlated) with Lander Sports. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Lander Sports Development has no effect on the direction of Anji Foodstuff i.e., Anji Foodstuff and Lander Sports go up and down completely randomly.

Pair Corralation between Anji Foodstuff and Lander Sports

Assuming the 90 days trading horizon Anji Foodstuff Co is expected to under-perform the Lander Sports. But the stock apears to be less risky and, when comparing its historical volatility, Anji Foodstuff Co is 1.44 times less risky than Lander Sports. The stock trades about -0.01 of its potential returns per unit of risk. The Lander Sports Development is currently generating about 0.06 of returns per unit of risk over similar time horizon. If you would invest  285.00  in Lander Sports Development on October 6, 2024 and sell it today you would earn a total of  35.00  from holding Lander Sports Development or generate 12.28% return on investment over 90 days.
Time Period3 Months [change]
DirectionMoves Together 
StrengthSignificant
Accuracy100.0%
ValuesDaily Returns

Anji Foodstuff Co  vs.  Lander Sports Development

 Performance 
       Timeline  
Anji Foodstuff 

Risk-Adjusted Performance

0 of 100

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

Risk-Adjusted Performance

4 of 100

 
Weak
 
Strong
Insignificant
Compared to the overall equity markets, risk-adjusted returns on investments in Lander Sports Development are ranked lower than 4 (%) of all global equities and portfolios over the last 90 days. Despite somewhat weak basic indicators, Lander Sports sustained solid returns over the last few months and may actually be approaching a breakup point.

Anji Foodstuff and Lander Sports Volatility Contrast

   Predicted Return Density   
       Returns  

Pair Trading with Anji Foodstuff and Lander Sports

The main advantage of trading using opposite Anji Foodstuff and Lander Sports positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Anji Foodstuff position performs unexpectedly, Lander Sports 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 Lander Sports will offset losses from the drop in Lander Sports' long position.
The idea behind Anji Foodstuff Co and Lander Sports Development 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 Price Transformation module to use Price Transformation models to analyze the depth of different equity instruments across global markets.

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