Correlation Between ANT and Federal Natl

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

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

Diversification Opportunities for ANT and Federal Natl

-0.44

Correlation Coefficient

ANT  Federal Natl

Very good diversification

The 3 months correlation between ANT and Federal is -0.44. Overlapping area represents the amount of risk that can be diversified away by holding ANT and Federal Natl Mtg in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Federal Natl Mtg 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 Federal Natl. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Federal Natl Mtg has no effect on the direction of ANT i.e., ANT and Federal Natl go up and down completely randomly.

Pair Corralation between ANT and Federal Natl

Assuming the 90 days trading horizon ANT is expected to generate 10.73 times more return on investment than Federal Natl. However, ANT is 10.73 times more volatile than Federal Natl Mtg. It trades about 0.1 of its potential returns per unit of risk. Federal Natl Mtg is currently generating about 0.09 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	Very Weak
Accuracy	59.96%
Values	Daily Returns

ANT  vs.  Federal Natl Mtg

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.

Federal Natl Mtg

Risk-Adjusted Performance

15 of 100

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Federal Natl Mtg are ranked lower than 15 (%) of all global equities and portfolios over the last 90 days. Despite fairly sluggish basic indicators, Federal Natl demonstrated solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with ANT and Federal Natl

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

The idea behind ANT and Federal Natl Mtg 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 Stock Screener module to find equities using a custom stock filter or screen asymmetry in trading patterns, price, volume, or investment outlook..