Correlation Between ANT and KODEX SP500TR

Can any of the company-specific risk be diversified away by investing in both ANT and KODEX SP500TR 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 KODEX SP500TR into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between ANT and KODEX SP500TR, you can compare the effects of market volatilities on ANT and KODEX SP500TR 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 KODEX SP500TR. Check out your portfolio center. Please also check ongoing floating volatility patterns of ANT and KODEX SP500TR.

Diversification Opportunities for ANT and KODEX SP500TR

-0.28

Correlation Coefficient

ANT  KODEX SP500TR

Very good diversification

The 3 months correlation between ANT and KODEX is -0.28. Overlapping area represents the amount of risk that can be diversified away by holding ANT and KODEX SP500TR in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on KODEX SP500TR 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 KODEX SP500TR. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of KODEX SP500TR has no effect on the direction of ANT i.e., ANT and KODEX SP500TR go up and down completely randomly.

Pair Corralation between ANT and KODEX SP500TR

Assuming the 90 days trading horizon ANT is expected to generate 73.82 times more return on investment than KODEX SP500TR. However, ANT is 73.82 times more volatile than KODEX SP500TR. It trades about 0.1 of its potential returns per unit of risk. KODEX SP500TR is currently generating about 0.16 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	61.88%
Values	Daily Returns

ANT  vs.  KODEX SP500TR

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 weak basic indicators, ANT exhibited solid returns over the last few months and may actually be approaching a breakup point.

KODEX SP500TR

Risk-Adjusted Performance

13 of 100

Good

Compared to the overall equity markets, risk-adjusted returns on investments in KODEX SP500TR are ranked lower than 13 (%) of all global equities and portfolios over the last 90 days. Despite somewhat weak basic indicators, KODEX SP500TR may actually be approaching a critical reversion point that can send shares even higher in February 2025.

Pair Trading with ANT and KODEX SP500TR

The main advantage of trading using opposite ANT and KODEX SP500TR positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if ANT position performs unexpectedly, KODEX SP500TR 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 KODEX SP500TR will offset losses from the drop in KODEX SP500TR's long position.

The idea behind ANT and KODEX SP500TR 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 Stocks Directory module to find actively traded stocks across global markets.