Correlation Between ANT and Strategy Shares

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

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

Diversification Opportunities for ANT and Strategy Shares

0.04

Correlation Coefficient

ANT  Strategy Shares

Significant diversification

The 3 months correlation between ANT and Strategy is 0.04. Overlapping area represents the amount of risk that can be diversified away by holding ANT and Strategy Shares in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Strategy Shares 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 Strategy Shares. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Strategy Shares has no effect on the direction of ANT i.e., ANT and Strategy Shares go up and down completely randomly.

Pair Corralation between ANT and Strategy Shares

Assuming the 90 days trading horizon ANT is expected to generate 116.13 times less return on investment than Strategy Shares. But when comparing it to its historical volatility, ANT is 24.42 times less risky than Strategy Shares. It trades about 0.06 of its potential returns per unit of risk. Strategy Shares is currently generating about 0.27 of returns per unit of risk over similar time horizon. If you would invest  0.00  in Strategy Shares on October 9, 2024 and sell it today you would earn a total of  2,445  from holding Strategy Shares or generate 9.223372036854776E16% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Insignificant
Accuracy	66.67%
Values	Daily Returns

ANT  vs.  Strategy Shares

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.

Strategy Shares

Risk-Adjusted Performance

21 of 100

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in Strategy Shares are ranked lower than 21 (%) of all global equities and portfolios over the last 90 days. In spite of very uncertain basic indicators, Strategy Shares displayed solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with ANT and Strategy Shares

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

The idea behind ANT and Strategy Shares 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 Financial Widgets module to easily integrated Macroaxis content with over 30 different plug-and-play financial widgets.