Correlation Between ANT and European Metals

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

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

Diversification Opportunities for ANT and European Metals

0.45

Correlation Coefficient

ANT  European Metals

Very weak diversification

The 3 months correlation between ANT and European is 0.45. Overlapping area represents the amount of risk that can be diversified away by holding ANT and European Metals Holdings in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on European Metals Holdings 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 European Metals. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of European Metals Holdings has no effect on the direction of ANT i.e., ANT and European Metals go up and down completely randomly.

Pair Corralation between ANT and European Metals

Assuming the 90 days trading horizon ANT is expected to generate 2.38 times more return on investment than European Metals. However, ANT is 2.38 times more volatile than European Metals Holdings. It trades about 0.11 of its potential returns per unit of risk. European Metals Holdings is currently generating about -0.01 per unit of risk. If you would invest  130.00  in ANT on October 11, 2024 and sell it today you would earn a total of  17.00  from holding ANT or generate 13.08% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Weak
Accuracy	90.91%
Values	Daily Returns

ANT  vs.  European Metals Holdings

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.

European Metals Holdings

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days European Metals Holdings has generated negative risk-adjusted returns adding no value to investors with long positions. Despite latest fragile performance, the Stock's essential indicators remain stable and the current disturbance on Wall Street may also be a sign of long-run gains for the company stockholders.

Pair Trading with ANT and European Metals

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

The idea behind ANT and European Metals Holdings 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 CEOs Directory module to screen CEOs from public companies around the world.