Correlation Between ANTA Sports and Anhui Conch

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

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

Diversification Opportunities for ANTA Sports and Anhui Conch

0.43

Correlation Coefficient

ANTA Sports  Anhui Conch

Very weak diversification

The 3 months correlation between ANTA and Anhui is 0.43. Overlapping area represents the amount of risk that can be diversified away by holding ANTA Sports Products and Anhui Conch Cement in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Anhui Conch Cement and ANTA Sports 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 ANTA Sports Products are associated (or correlated) with Anhui Conch. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Anhui Conch Cement has no effect on the direction of ANTA Sports i.e., ANTA Sports and Anhui Conch go up and down completely randomly.

Pair Corralation between ANTA Sports and Anhui Conch

Assuming the 90 days horizon ANTA Sports Products is expected to generate 1.12 times more return on investment than Anhui Conch. However, ANTA Sports is 1.12 times more volatile than Anhui Conch Cement. It trades about 0.1 of its potential returns per unit of risk. Anhui Conch Cement is currently generating about 0.03 per unit of risk. If you would invest  24,701  in ANTA Sports Products on December 4, 2024 and sell it today you would earn a total of  3,472  from holding ANTA Sports Products or generate 14.06% return on investment over 90 days.

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

ANTA Sports Products  vs.  Anhui Conch Cement

ANTA Sports Products

Risk-Adjusted Performance

OK

Compared to the overall equity markets, risk-adjusted returns on investments in ANTA Sports Products are ranked lower than 8 (%) of all global equities and portfolios over the last 90 days. In spite of fairly weak fundamental indicators, ANTA Sports showed solid returns over the last few months and may actually be approaching a breakup point.

Anhui Conch Cement

Risk-Adjusted Performance

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in Anhui Conch Cement are ranked lower than 2 (%) of all global equities and portfolios over the last 90 days. In spite of fairly strong technical indicators, Anhui Conch is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

Pair Trading with ANTA Sports and Anhui Conch

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

The idea behind ANTA Sports Products and Anhui Conch Cement 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.

Check out your portfolio center.

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 Headlines Timeline module to stay connected to all market stories and filter out noise. Drill down to analyze hype elasticity.