Correlation Between ANT and Ab Equity

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

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

Diversification Opportunities for ANT and Ab Equity

0.11

Correlation Coefficient

ANT  Ab Equity

Average diversification

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

Pair Corralation between ANT and Ab Equity

Assuming the 90 days trading horizon ANT is expected to generate 80.42 times more return on investment than Ab Equity. However, ANT is 80.42 times more volatile than Ab Equity Income. It trades about 0.12 of its potential returns per unit of risk. Ab Equity Income is currently generating about 0.02 per unit of risk. If you would invest  933.00  in ANT on October 25, 2024 and sell it today you would lose (786.00) from holding ANT or give up 84.24% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Insignificant
Accuracy	86.27%
Values	Daily Returns

ANT  vs.  Ab Equity Income

ANT

Risk-Adjusted Performance

10 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in ANT are ranked lower than 10 (%) 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.

Ab Equity Income

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Ab Equity Income has generated negative risk-adjusted returns adding no value to fund investors. In spite of fairly strong basic indicators, Ab Equity is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

Pair Trading with ANT and Ab Equity

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

The idea behind ANT and Ab Equity Income 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 Portfolio Dashboard module to portfolio dashboard that provides centralized access to all your investments.