Correlation Between ANT and Heidelberg Pharma

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

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

Diversification Opportunities for ANT and Heidelberg Pharma

0.5

Correlation Coefficient

ANT  Heidelberg Pharma

Very weak diversification

The 3 months correlation between ANT and Heidelberg is 0.5. Overlapping area represents the amount of risk that can be diversified away by holding ANT and Heidelberg Pharma AG in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Heidelberg Pharma 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 Heidelberg Pharma. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Heidelberg Pharma has no effect on the direction of ANT i.e., ANT and Heidelberg Pharma go up and down completely randomly.

Pair Corralation between ANT and Heidelberg Pharma

Assuming the 90 days trading horizon ANT is expected to generate 26.42 times more return on investment than Heidelberg Pharma. However, ANT is 26.42 times more volatile than Heidelberg Pharma AG. It trades about 0.12 of its potential returns per unit of risk. Heidelberg Pharma AG is currently generating about -0.03 per unit of risk. If you would invest  357.00  in ANT on October 24, 2024 and sell it today you would lose (210.00) from holding ANT or give up 58.82% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Weak
Accuracy	50.84%
Values	Daily Returns

ANT  vs.  Heidelberg Pharma AG

ANT

Risk-Adjusted Performance

10 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in ANT are ranked lower than 10 (%) 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.

Heidelberg Pharma

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Heidelberg Pharma AG has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of comparatively stable basic indicators, Heidelberg Pharma is not utilizing all of its potentials. The current stock price uproar, may contribute to short-horizon losses for the private investors.

Pair Trading with ANT and Heidelberg Pharma

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

The idea behind ANT and Heidelberg Pharma AG 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.

Check out your portfolio center.

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 Headlines Timeline module to stay connected to all market stories and filter out noise. Drill down to analyze hype elasticity.