Correlation Between ANT and IShares BB
Can any of the company-specific risk be diversified away by investing in both ANT and IShares BB 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 IShares BB into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between ANT and iShares BB Rated, you can compare the effects of market volatilities on ANT and IShares BB 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 IShares BB. Check out your portfolio center. Please also check ongoing floating volatility patterns of ANT and IShares BB.
Diversification Opportunities for ANT and IShares BB
-0.34 | Correlation Coefficient |
Very good diversification
The 3 months correlation between ANT and IShares is -0.34. Overlapping area represents the amount of risk that can be diversified away by holding ANT and iShares BB Rated in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on iShares BB Rated 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 IShares BB. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of iShares BB Rated has no effect on the direction of ANT i.e., ANT and IShares BB go up and down completely randomly.
Pair Corralation between ANT and IShares BB
Assuming the 90 days trading horizon ANT is expected to generate 47.5 times more return on investment than IShares BB. However, ANT is 47.5 times more volatile than iShares BB Rated. It trades about 0.12 of its potential returns per unit of risk. iShares BB Rated is currently generating about -0.12 per unit of risk. If you would invest 125.00 in ANT on October 12, 2024 and sell it today you would earn a total of 22.00 from holding ANT or generate 17.6% return on investment over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Against |
Strength | Insignificant |
Accuracy | 95.24% |
Values | Daily Returns |
ANT vs. iShares BB Rated
Performance |
Timeline |
ANT |
iShares BB Rated |
ANT and IShares BB Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with ANT and IShares BB
The main advantage of trading using opposite ANT and IShares BB positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if ANT position performs unexpectedly, IShares BB 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 IShares BB will offset losses from the drop in IShares BB's long position.The idea behind ANT and iShares BB Rated 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 Money Flow Index module to determine momentum by analyzing Money Flow Index and other technical indicators.
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