Correlation Between ANT and Corporacion Aceros

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

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

Diversification Opportunities for ANT and Corporacion Aceros

0.3

Correlation Coefficient

ANT  Corporacion Aceros

Weak diversification

The 3 months correlation between ANT and Corporacion is 0.3. Overlapping area represents the amount of risk that can be diversified away by holding ANT and Corporacion Aceros Arequipa in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Corporacion Aceros 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 Corporacion Aceros. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Corporacion Aceros has no effect on the direction of ANT i.e., ANT and Corporacion Aceros go up and down completely randomly.

Pair Corralation between ANT and Corporacion Aceros

Assuming the 90 days trading horizon ANT is expected to generate 12.18 times more return on investment than Corporacion Aceros. However, ANT is 12.18 times more volatile than Corporacion Aceros Arequipa. It trades about 0.07 of its potential returns per unit of risk. Corporacion Aceros Arequipa is currently generating about -0.05 per unit of risk. If you would invest  147.00  in ANT on December 24, 2024 and sell it today you would lose (12.00) from holding ANT or give up 8.16% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Very Weak
Accuracy	96.88%
Values	Daily Returns

ANT  vs.  Corporacion Aceros Arequipa

ANT

Risk-Adjusted Performance

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in ANT are ranked lower than 5 (%) 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.

Corporacion Aceros

Risk-Adjusted Performance

Very Weak

Over the last 90 days Corporacion Aceros Arequipa has generated negative risk-adjusted returns adding no value to investors with long positions. Despite fairly strong technical and fundamental indicators, Corporacion Aceros is not utilizing all of its potentials. The current stock price confusion, may contribute to short-horizon losses for the traders.

Pair Trading with ANT and Corporacion Aceros

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

The idea behind ANT and Corporacion Aceros Arequipa 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 Bond Analysis module to evaluate and analyze corporate bonds as a potential investment for your portfolios..