Correlation Between ANT and REX FANG

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

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

Diversification Opportunities for ANT and REX FANG

-0.39

Correlation Coefficient

ANT  REX FANG

Very good diversification

The 3 months correlation between ANT and REX is -0.39. Overlapping area represents the amount of risk that can be diversified away by holding ANT and REX FANG Innovation in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on REX FANG Innovation 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 REX FANG. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of REX FANG Innovation has no effect on the direction of ANT i.e., ANT and REX FANG go up and down completely randomly.

Pair Corralation between ANT and REX FANG

Assuming the 90 days trading horizon ANT is expected to generate 19.53 times more return on investment than REX FANG. However, ANT is 19.53 times more volatile than REX FANG Innovation. It trades about 0.09 of its potential returns per unit of risk. REX FANG Innovation is currently generating about -0.04 per unit of risk. If you would invest  147.00  in ANT on October 26, 2024 and sell it today you would earn a total of  0.00  from holding ANT or generate 0.0% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Insignificant
Accuracy	85.71%
Values	Daily Returns

ANT  vs.  REX FANG Innovation

ANT

Risk-Adjusted Performance

13 of 100

OK

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.

REX FANG Innovation

Risk-Adjusted Performance

4 of 100

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in REX FANG Innovation are ranked lower than 4 (%) of all global equities and portfolios over the last 90 days. Despite fairly strong basic indicators, REX FANG 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 REX FANG

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

The idea behind ANT and REX FANG Innovation 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 Equity Forecasting module to use basic forecasting models to generate price predictions and determine price momentum.