Correlation Between ANT and IncomeShares Nasdaq

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

By analyzing existing cross correlation between ANT and IncomeShares Nasdaq 100, you can compare the effects of market volatilities on ANT and IncomeShares Nasdaq 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 IncomeShares Nasdaq. Check out your portfolio center. Please also check ongoing floating volatility patterns of ANT and IncomeShares Nasdaq.

Diversification Opportunities for ANT and IncomeShares Nasdaq

-0.19

Correlation Coefficient

ANT  IncomeShares Nasdaq

Good diversification

The 3 months correlation between ANT and IncomeShares is -0.19. Overlapping area represents the amount of risk that can be diversified away by holding ANT and IncomeShares Nasdaq 100 in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on IncomeShares Nasdaq 100 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 IncomeShares Nasdaq. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of IncomeShares Nasdaq 100 has no effect on the direction of ANT i.e., ANT and IncomeShares Nasdaq go up and down completely randomly.

Pair Corralation between ANT and IncomeShares Nasdaq

Assuming the 90 days trading horizon ANT is expected to generate 59.69 times more return on investment than IncomeShares Nasdaq. However, ANT is 59.69 times more volatile than IncomeShares Nasdaq 100. It trades about 0.14 of its potential returns per unit of risk. IncomeShares Nasdaq 100 is currently generating about -0.02 per unit of risk. If you would invest  1,051  in ANT on October 24, 2024 and sell it today you would lose (904.00) from holding ANT or give up 86.01% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Insignificant
Accuracy	68.25%
Values	Daily Returns

ANT  vs.  IncomeShares Nasdaq 100

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.

IncomeShares Nasdaq 100

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days IncomeShares Nasdaq 100 has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of rather sound basic indicators, IncomeShares Nasdaq is not utilizing all of its potentials. The latest stock price tumult, may contribute to shorter-term losses for the shareholders.

Pair Trading with ANT and IncomeShares Nasdaq

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

The idea behind ANT and IncomeShares Nasdaq 100 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 Portfolio Volatility module to check portfolio volatility and analyze historical return density to properly model market risk.