Correlation Between ANT and JPM BetaBuilders

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

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

Diversification Opportunities for ANT and JPM BetaBuilders

-0.41

Correlation Coefficient

ANT  JPM BetaBuilders

Very good diversification

The 3 months correlation between ANT and JPM is -0.41. Overlapping area represents the amount of risk that can be diversified away by holding ANT and JPM BetaBuilders Treasury in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on JPM BetaBuilders Treasury 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 JPM BetaBuilders. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of JPM BetaBuilders Treasury has no effect on the direction of ANT i.e., ANT and JPM BetaBuilders go up and down completely randomly.

Pair Corralation between ANT and JPM BetaBuilders

Assuming the 90 days trading horizon ANT is expected to generate 167.38 times more return on investment than JPM BetaBuilders. However, ANT is 167.38 times more volatile than JPM BetaBuilders Treasury. It trades about 0.12 of its potential returns per unit of risk. JPM BetaBuilders Treasury is currently generating about 0.07 per unit of risk. If you would invest  421.00  in ANT on October 24, 2024 and sell it today you would lose (274.00) from holding ANT or give up 65.08% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Very Weak
Accuracy	47.86%
Values	Daily Returns

ANT  vs.  JPM BetaBuilders Treasury

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.

JPM BetaBuilders Treasury

Risk-Adjusted Performance

15 of 100

Good

Compared to the overall equity markets, risk-adjusted returns on investments in JPM BetaBuilders Treasury are ranked lower than 15 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively uncertain basic indicators, JPM BetaBuilders may actually be approaching a critical reversion point that can send shares even higher in February 2025.

Pair Trading with ANT and JPM BetaBuilders

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

The idea behind ANT and JPM BetaBuilders Treasury 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 Options Analysis module to analyze and evaluate options and option chains as a potential hedge for your portfolios.