Correlation Between ANT and Eurocommercial Properties

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

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

Diversification Opportunities for ANT and Eurocommercial Properties

0.49

Correlation Coefficient

ANT  Eurocommercial Properties

Very weak diversification

The 3 months correlation between ANT and Eurocommercial is 0.49. Overlapping area represents the amount of risk that can be diversified away by holding ANT and Eurocommercial Properties NV in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Eurocommercial Properties 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 Eurocommercial Properties. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Eurocommercial Properties has no effect on the direction of ANT i.e., ANT and Eurocommercial Properties go up and down completely randomly.

Pair Corralation between ANT and Eurocommercial Properties

Assuming the 90 days trading horizon ANT is expected to generate 15.11 times more return on investment than Eurocommercial Properties. However, ANT is 15.11 times more volatile than Eurocommercial Properties NV. It trades about 0.1 of its potential returns per unit of risk. Eurocommercial Properties NV is currently generating about 0.01 per unit of risk. If you would invest  128.00  in ANT on October 26, 2024 and sell it today you would earn a total of  19.00  from holding ANT or generate 14.84% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Weak
Accuracy	95.35%
Values	Daily Returns

ANT  vs.  Eurocommercial Properties NV

ANT

Risk-Adjusted Performance

13 of 100

Good

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.

Eurocommercial Properties

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Eurocommercial Properties NV has generated negative risk-adjusted returns adding no value to investors with long positions. Despite somewhat strong basic indicators, Eurocommercial Properties is not utilizing all of its potentials. The newest stock price disturbance, may contribute to short-term losses for the investors.

Pair Trading with ANT and Eurocommercial Properties

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

The idea behind ANT and Eurocommercial Properties NV 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 Risk-Return Analysis module to view associations between returns expected from investment and the risk you assume.