Correlation Between ANT and Far Eastern

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

By analyzing existing cross correlation between ANT and Far Eastern International, you can compare the effects of market volatilities on ANT and Far Eastern 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 ANT with a short position of Far Eastern. Check out your portfolio center. Please also check ongoing floating volatility patterns of ANT and Far Eastern.

Diversification Opportunities for ANT and Far Eastern

-0.11

Correlation Coefficient

ANT  Far Eastern

Good diversification

The 3 months correlation between ANT and Far is -0.11. Overlapping area represents the amount of risk that can be diversified away by holding ANT and Far Eastern International in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Far Eastern International and ANT 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 ANT are associated (or correlated) with Far Eastern. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Far Eastern International has no effect on the direction of ANT i.e., ANT and Far Eastern go up and down completely randomly.

Pair Corralation between ANT and Far Eastern

Assuming the 90 days trading horizon ANT is expected to generate 51.25 times more return on investment than Far Eastern. However, ANT is 51.25 times more volatile than Far Eastern International. It trades about 0.1 of its potential returns per unit of risk. Far Eastern International is currently generating about 0.03 per unit of risk. If you would invest  288.00  in ANT on October 12, 2024 and sell it today you would lose (141.00) from holding ANT or give up 48.96% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Insignificant
Accuracy	61.62%
Values	Daily Returns

ANT  vs.  Far Eastern International

ANT

Risk-Adjusted Performance

16 of 100

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in ANT are ranked lower than 16 (%) of all global equities and portfolios over the last 90 days. In spite of rather unsteady basic indicators, ANT exhibited solid returns over the last few months and may actually be approaching a breakup point.

Far Eastern International

Risk-Adjusted Performance

1 of 100

Very Weak

Compared to the overall equity markets, risk-adjusted returns on investments in Far Eastern International are ranked lower than 1 (%) of all global equities and portfolios over the last 90 days. In spite of fairly stable basic indicators, Far Eastern is not utilizing all of its potentials. The latest stock price fuss, may contribute to near-short-term losses for the sophisticated investors.

Pair Trading with ANT and Far Eastern

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

The idea behind ANT and Far Eastern International 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 Technical Analysis module to check basic technical indicators and analysis based on most latest market data.