Correlation Between 24SEVENOFFICE GROUP and ANTA SPORTS

Can any of the company-specific risk be diversified away by investing in both 24SEVENOFFICE GROUP 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 24SEVENOFFICE GROUP and ANTA SPORTS into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between 24SEVENOFFICE GROUP AB and ANTA SPORTS PRODUCT, you can compare the effects of market volatilities on 24SEVENOFFICE GROUP 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 24SEVENOFFICE GROUP with a short position of ANTA SPORTS. Check out your portfolio center. Please also check ongoing floating volatility patterns of 24SEVENOFFICE GROUP and ANTA SPORTS.

Diversification Opportunities for 24SEVENOFFICE GROUP and ANTA SPORTS

0.01

Correlation Coefficient

24SEVENOFFICE GROUP  ANTA SPORTS

Significant diversification

The 3 months correlation between 24SEVENOFFICE and ANTA is 0.01. Overlapping area represents the amount of risk that can be diversified away by holding 24SEVENOFFICE GROUP AB and ANTA SPORTS PRODUCT in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on ANTA SPORTS PRODUCT and 24SEVENOFFICE GROUP 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 24SEVENOFFICE GROUP AB 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 PRODUCT has no effect on the direction of 24SEVENOFFICE GROUP i.e., 24SEVENOFFICE GROUP and ANTA SPORTS go up and down completely randomly.

Pair Corralation between 24SEVENOFFICE GROUP and ANTA SPORTS

Assuming the 90 days horizon 24SEVENOFFICE GROUP AB is expected to generate 1.43 times more return on investment than ANTA SPORTS. However, 24SEVENOFFICE GROUP is 1.43 times more volatile than ANTA SPORTS PRODUCT. It trades about 0.09 of its potential returns per unit of risk. ANTA SPORTS PRODUCT is currently generating about 0.04 per unit of risk. If you would invest  47.00  in 24SEVENOFFICE GROUP AB on October 24, 2024 and sell it today you would earn a total of  118.00  from holding 24SEVENOFFICE GROUP AB or generate 251.06% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Insignificant
Accuracy	99.76%
Values	Daily Returns

24SEVENOFFICE GROUP AB  vs.  ANTA SPORTS PRODUCT

24SEVENOFFICE GROUP

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days 24SEVENOFFICE GROUP AB has generated negative risk-adjusted returns adding no value to investors with long positions. Despite fragile 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 PRODUCT

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days ANTA SPORTS PRODUCT has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of rather sound basic indicators, ANTA SPORTS is not utilizing all of its potentials. The current stock price tumult, may contribute to shorter-term losses for the shareholders.

Pair Trading with 24SEVENOFFICE GROUP and ANTA SPORTS

The main advantage of trading using opposite 24SEVENOFFICE GROUP and ANTA SPORTS positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if 24SEVENOFFICE GROUP 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's long position.

The idea behind 24SEVENOFFICE GROUP AB and ANTA SPORTS PRODUCT 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 Portfolio Backtesting module to avoid under-diversification and over-optimization by backtesting your portfolios.