Correlation Between ANT and Alexander Forbes

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

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

Diversification Opportunities for ANT and Alexander Forbes

0.31

Correlation Coefficient

ANT  Alexander Forbes

Weak diversification

The 3 months correlation between ANT and Alexander is 0.31. Overlapping area represents the amount of risk that can be diversified away by holding ANT and Alexander Forbes Grp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Alexander Forbes Grp 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 Alexander Forbes. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Alexander Forbes Grp has no effect on the direction of ANT i.e., ANT and Alexander Forbes go up and down completely randomly.

Pair Corralation between ANT and Alexander Forbes

Assuming the 90 days trading horizon ANT is expected to generate 8.63 times more return on investment than Alexander Forbes. However, ANT is 8.63 times more volatile than Alexander Forbes Grp. It trades about 0.09 of its potential returns per unit of risk. Alexander Forbes Grp is currently generating about 0.13 per unit of risk. If you would invest  147.00  in ANT on October 26, 2024 and sell it today you would earn a total of  0.00  from holding ANT or generate 0.0% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Very Weak
Accuracy	95.24%
Values	Daily Returns

ANT  vs.  Alexander Forbes Grp

ANT

Risk-Adjusted Performance

13 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in ANT are ranked lower than 13 (%) 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.

Alexander Forbes Grp

Risk-Adjusted Performance

11 of 100

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Alexander Forbes Grp are ranked lower than 11 (%) of all global equities and portfolios over the last 90 days. In spite of rather unsteady technical and fundamental indicators, Alexander Forbes exhibited solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with ANT and Alexander Forbes

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

The idea behind ANT and Alexander Forbes Grp 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 Competition Analyzer module to analyze and compare many basic indicators for a group of related or unrelated entities.