Correlation Between ANT and Gmo Emerging

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

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

Diversification Opportunities for ANT and Gmo Emerging

-0.03

Correlation Coefficient

ANT  Gmo Emerging

Good diversification

The 3 months correlation between ANT and Gmo is -0.03. Overlapping area represents the amount of risk that can be diversified away by holding ANT and Gmo Emerging Markets in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Gmo Emerging Markets 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 Gmo Emerging. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Gmo Emerging Markets has no effect on the direction of ANT i.e., ANT and Gmo Emerging go up and down completely randomly.

Pair Corralation between ANT and Gmo Emerging

Assuming the 90 days trading horizon ANT is expected to generate 15.63 times more return on investment than Gmo Emerging. However, ANT is 15.63 times more volatile than Gmo Emerging Markets. It trades about 0.06 of its potential returns per unit of risk. Gmo Emerging Markets is currently generating about 0.11 per unit of risk. If you would invest  147.00  in ANT on December 18, 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	93.65%
Values	Daily Returns

ANT  vs.  Gmo Emerging Markets

ANT

Risk-Adjusted Performance

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in ANT are ranked lower than 4 (%) 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.

Gmo Emerging Markets

Risk-Adjusted Performance

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in Gmo Emerging Markets are ranked lower than 8 (%) of all funds and portfolios of funds over the last 90 days. In spite of fairly strong primary indicators, Gmo Emerging is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

Pair Trading with ANT and Gmo Emerging

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

The idea behind ANT and Gmo Emerging Markets 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 Analysis module to research over 250,000 global equities including funds, stocks and ETFs to find investment opportunities.