Correlation Between ANT and James Small

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

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

Diversification Opportunities for ANT and James Small

-0.06

Correlation Coefficient

ANT  James Small

Good diversification

The 3 months correlation between ANT and James is -0.06. Overlapping area represents the amount of risk that can be diversified away by holding ANT and James Small Cap in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on James Small Cap 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 James Small. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of James Small Cap has no effect on the direction of ANT i.e., ANT and James Small go up and down completely randomly.

Pair Corralation between ANT and James Small

Assuming the 90 days trading horizon ANT is expected to generate 10.68 times more return on investment than James Small. However, ANT is 10.68 times more volatile than James Small Cap. It trades about 0.06 of its potential returns per unit of risk. James Small Cap is currently generating about -0.25 per unit of risk. If you would invest  145.00  in ANT on October 9, 2024 and sell it today you would earn a total of  2.00  from holding ANT or generate 1.38% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Insignificant
Accuracy	95.24%
Values	Daily Returns

ANT  vs.  James Small Cap

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.

James Small Cap

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days James Small Cap has generated negative risk-adjusted returns adding no value to fund investors. In spite of fairly strong fundamental indicators, James Small 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 James Small

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

The idea behind ANT and James Small Cap 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 Odds Of Bankruptcy module to get analysis of equity chance of financial distress in the next 2 years.