Correlation Between ANTA Sports and HONEYWELL

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

Diversification Opportunities for ANTA Sports and HONEYWELL

0.03

Correlation Coefficient

ANTA Sports  HONEYWELL

Significant diversification

The 3 months correlation between ANTA and HONEYWELL is 0.03. Overlapping area represents the amount of risk that can be diversified away by holding ANTA Sports Products and HONEYWELL INTL INC in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on HONEYWELL INTL INC 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 HONEYWELL. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of HONEYWELL INTL INC has no effect on the direction of ANTA Sports i.e., ANTA Sports and HONEYWELL go up and down completely randomly.

Pair Corralation between ANTA Sports and HONEYWELL

Assuming the 90 days horizon ANTA Sports Products is expected to generate 6.71 times more return on investment than HONEYWELL. However, ANTA Sports is 6.71 times more volatile than HONEYWELL INTL INC. It trades about 0.04 of its potential returns per unit of risk. HONEYWELL INTL INC is currently generating about -0.15 per unit of risk. If you would invest  24,221  in ANTA Sports Products on August 30, 2024 and sell it today you would earn a total of  993.00  from holding ANTA Sports Products or generate 4.1% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Insignificant
Accuracy	80.95%
Values	Daily Returns

ANTA Sports Products  vs.  HONEYWELL INTL INC

ANTA Sports Products

Risk-Adjusted Performance

2 of 100

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in ANTA Sports Products are ranked lower than 2 (%) of all global equities and portfolios over the last 90 days. In spite of fairly fragile fundamental indicators, ANTA Sports may actually be approaching a critical reversion point that can send shares even higher in December 2024.

HONEYWELL INTL INC

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days HONEYWELL INTL INC has generated negative risk-adjusted returns adding no value to investors with long positions. Despite somewhat strong basic indicators, HONEYWELL 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 HONEYWELL

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

The idea behind ANTA Sports Products and HONEYWELL INTL INC 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 Pattern Recognition module to use different Pattern Recognition models to time the market across multiple global exchanges.