Correlation Between ANTA Sports and Definitive Healthcare

Can any of the company-specific risk be diversified away by investing in both ANTA Sports and Definitive Healthcare 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 Definitive Healthcare 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 Definitive Healthcare Corp, you can compare the effects of market volatilities on ANTA Sports and Definitive Healthcare 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 Definitive Healthcare. Check out your portfolio center. Please also check ongoing floating volatility patterns of ANTA Sports and Definitive Healthcare.

Diversification Opportunities for ANTA Sports and Definitive Healthcare

0.01

Correlation Coefficient

ANTA Sports  Definitive Healthcare

Significant diversification

The 3 months correlation between ANTA and Definitive is 0.01. Overlapping area represents the amount of risk that can be diversified away by holding ANTA Sports Products and Definitive Healthcare Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Definitive Healthcare 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 Definitive Healthcare. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Definitive Healthcare has no effect on the direction of ANTA Sports i.e., ANTA Sports and Definitive Healthcare go up and down completely randomly.

Pair Corralation between ANTA Sports and Definitive Healthcare

Assuming the 90 days horizon ANTA Sports Products is expected to generate 0.71 times more return on investment than Definitive Healthcare. However, ANTA Sports Products is 1.41 times less risky than Definitive Healthcare. It trades about -0.01 of its potential returns per unit of risk. Definitive Healthcare Corp is currently generating about -0.03 per unit of risk. If you would invest  35,547  in ANTA Sports Products on October 25, 2024 and sell it today you would lose (9,147) from holding ANTA Sports Products or give up 25.73% of portfolio value over 90 days.

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

ANTA Sports Products  vs.  Definitive Healthcare Corp

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. In spite of fairly strong fundamental indicators, ANTA Sports is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

Definitive Healthcare

Risk-Adjusted Performance

7 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Definitive Healthcare Corp are ranked lower than 7 (%) of all global equities and portfolios over the last 90 days. Despite fairly weak technical indicators, Definitive Healthcare demonstrated solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with ANTA Sports and Definitive Healthcare

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

The idea behind ANTA Sports Products and Definitive Healthcare Corp 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 Fundamentals Comparison module to compare fundamentals across multiple equities to find investing opportunities.