Correlation Between ANT and Patterson Companies

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

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

Diversification Opportunities for ANT and Patterson Companies

-0.16

Correlation Coefficient

ANT  Patterson Companies

Good diversification

The 3 months correlation between ANT and Patterson is -0.16. Overlapping area represents the amount of risk that can be diversified away by holding ANT and Patterson Companies in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Patterson Companies 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 Patterson Companies. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Patterson Companies has no effect on the direction of ANT i.e., ANT and Patterson Companies go up and down completely randomly.

Pair Corralation between ANT and Patterson Companies

Assuming the 90 days trading horizon ANT is expected to generate 22.19 times more return on investment than Patterson Companies. However, ANT is 22.19 times more volatile than Patterson Companies. It trades about 0.1 of its potential returns per unit of risk. Patterson Companies is currently generating about 0.03 per unit of risk. If you would invest  293.00  in ANT on October 10, 2024 and sell it today you would lose (146.00) from holding ANT or give up 49.83% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Insignificant
Accuracy	57.53%
Values	Daily Returns

ANT  vs.  Patterson Companies

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.

Patterson Companies

Risk-Adjusted Performance

15 of 100

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Patterson Companies are ranked lower than 15 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively fragile basic indicators, Patterson Companies unveiled solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with ANT and Patterson Companies

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

The idea behind ANT and Patterson Companies 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 Stock Tickers module to use high-impact, comprehensive, and customizable stock tickers that can be easily integrated to any websites.