Correlation Between ANT and Numinus Wellness

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

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

Diversification Opportunities for ANT and Numinus Wellness

-0.26

Correlation Coefficient

ANT  Numinus Wellness

Very good diversification

The 3 months correlation between ANT and Numinus is -0.26. Overlapping area represents the amount of risk that can be diversified away by holding ANT and Numinus Wellness in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Numinus Wellness 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 Numinus Wellness. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Numinus Wellness has no effect on the direction of ANT i.e., ANT and Numinus Wellness go up and down completely randomly.

Pair Corralation between ANT and Numinus Wellness

Assuming the 90 days trading horizon ANT is expected to generate 1.34 times more return on investment than Numinus Wellness. However, ANT is 1.34 times more volatile than Numinus Wellness. It trades about 0.06 of its potential returns per unit of risk. Numinus Wellness is currently generating about 0.04 per unit of risk. If you would invest  145.00  in ANT on October 10, 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	90.48%
Values	Daily Returns

ANT  vs.  Numinus Wellness

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.

Numinus Wellness

Risk-Adjusted Performance

9 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Numinus Wellness are ranked lower than 9 (%) of all global equities and portfolios over the last 90 days. In spite of very unfluctuating basic indicators, Numinus Wellness displayed solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with ANT and Numinus Wellness

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

The idea behind ANT and Numinus Wellness 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 Watchlist Optimization module to optimize watchlists to build efficient portfolios or rebalance existing positions based on the mean-variance optimization algorithm.