Correlation Between ANT and CHINA CONCH

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

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

Diversification Opportunities for ANT and CHINA CONCH

0.08

Correlation Coefficient

ANT  CHINA CONCH

Significant diversification

The 3 months correlation between ANT and CHINA is 0.08. Overlapping area represents the amount of risk that can be diversified away by holding ANT and CHINA CH VENT in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on CHINA CH VENT 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 CHINA CONCH. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of CHINA CH VENT has no effect on the direction of ANT i.e., ANT and CHINA CONCH go up and down completely randomly.

Pair Corralation between ANT and CHINA CONCH

Assuming the 90 days trading horizon ANT is expected to generate 13.48 times more return on investment than CHINA CONCH. However, ANT is 13.48 times more volatile than CHINA CH VENT. It trades about 0.1 of its potential returns per unit of risk. CHINA CH VENT is currently generating about 0.01 per unit of risk. If you would invest  298.00  in ANT on October 11, 2024 and sell it today you would lose (151.00) from holding ANT or give up 50.67% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Insignificant
Accuracy	59.4%
Values	Daily Returns

ANT  vs.  CHINA CH VENT

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.

CHINA CH VENT

Risk-Adjusted Performance

1 of 100

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in CHINA CH VENT are ranked lower than 1 (%) of all global equities and portfolios over the last 90 days. Despite nearly stable basic indicators, CHINA CONCH is not utilizing all of its potentials. The current stock price disturbance, may contribute to mid-run losses for the stockholders.

Pair Trading with ANT and CHINA CONCH

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

The idea behind ANT and CHINA CH VENT 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 Idea Analyzer module to analyze all characteristics, volatility and risk-adjusted return of Macroaxis ideas.