Correlation Between ANT and Caravel Minerals

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

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

Diversification Opportunities for ANT and Caravel Minerals

-0.26

Correlation Coefficient

ANT  Caravel Minerals

Very good diversification

The 3 months correlation between ANT and Caravel is -0.26. Overlapping area represents the amount of risk that can be diversified away by holding ANT and Caravel Minerals in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Caravel Minerals 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 Caravel Minerals. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Caravel Minerals has no effect on the direction of ANT i.e., ANT and Caravel Minerals go up and down completely randomly.

Pair Corralation between ANT and Caravel Minerals

Assuming the 90 days trading horizon ANT is expected to generate 10.85 times more return on investment than Caravel Minerals. However, ANT is 10.85 times more volatile than Caravel Minerals. It trades about 0.1 of its potential returns per unit of risk. Caravel Minerals is currently generating about 0.02 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 Against
Strength	Insignificant
Accuracy	59.64%
Values	Daily Returns

ANT  vs.  Caravel Minerals

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.

Caravel Minerals

Risk-Adjusted Performance

3 of 100

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in Caravel Minerals are ranked lower than 3 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively uncertain basic indicators, Caravel Minerals may actually be approaching a critical reversion point that can send shares even higher in February 2025.

Pair Trading with ANT and Caravel Minerals

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

The idea behind ANT and Caravel Minerals 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 Economic Indicators module to top statistical indicators that provide insights into how an economy is performing.