Correlation Between VARIOUS EATERIES and ANTA Sports

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

By analyzing existing cross correlation between VARIOUS EATERIES LS and ANTA Sports Products, you can compare the effects of market volatilities on VARIOUS EATERIES and ANTA 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 VARIOUS EATERIES with a short position of ANTA Sports. Check out your portfolio center. Please also check ongoing floating volatility patterns of VARIOUS EATERIES and ANTA Sports.

Diversification Opportunities for VARIOUS EATERIES and ANTA Sports

0.16

Correlation Coefficient

VARIOUS EATERIES  ANTA Sports

Average diversification

The 3 months correlation between VARIOUS and ANTA is 0.16. Overlapping area represents the amount of risk that can be diversified away by holding VARIOUS EATERIES LS and ANTA Sports Products in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on ANTA Sports Products and VARIOUS EATERIES 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 VARIOUS EATERIES LS are associated (or correlated) with ANTA Sports. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of ANTA Sports Products has no effect on the direction of VARIOUS EATERIES i.e., VARIOUS EATERIES and ANTA Sports go up and down completely randomly.

Pair Corralation between VARIOUS EATERIES and ANTA Sports

Assuming the 90 days horizon VARIOUS EATERIES LS is expected to under-perform the ANTA Sports. But the stock apears to be less risky and, when comparing its historical volatility, VARIOUS EATERIES LS is 1.83 times less risky than ANTA Sports. The stock trades about -0.24 of its potential returns per unit of risk. The ANTA Sports Products is currently generating about 0.05 of returns per unit of risk over similar time horizon. If you would invest  974.00  in ANTA Sports Products on October 25, 2024 and sell it today you would earn a total of  14.00  from holding ANTA Sports Products or generate 1.44% return on investment over 90 days.

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

VARIOUS EATERIES LS  vs.  ANTA Sports Products

VARIOUS EATERIES

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days VARIOUS EATERIES LS has generated negative risk-adjusted returns adding no value to investors with long positions. Despite uncertain performance in the last few months, the Stock's basic indicators remain nearly stable which may send shares a bit higher in February 2025. The current disturbance may also be a sign of long-run up-swing for the company stockholders.

ANTA Sports Products

Risk-Adjusted Performance

0 of 100

Very Weak

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

Pair Trading with VARIOUS EATERIES and ANTA Sports

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

The idea behind VARIOUS EATERIES LS and ANTA Sports Products 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 Insider Screener module to find insiders across different sectors to evaluate their impact on performance.