Correlation Between ANT and Red Robin

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

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

Diversification Opportunities for ANT and Red Robin

0.43

Correlation Coefficient

ANT  Red Robin

Very weak diversification

The 3 months correlation between ANT and Red is 0.43. Overlapping area represents the amount of risk that can be diversified away by holding ANT and Red Robin Gourmet in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Red Robin Gourmet 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 Red Robin. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Red Robin Gourmet has no effect on the direction of ANT i.e., ANT and Red Robin go up and down completely randomly.

Pair Corralation between ANT and Red Robin

Assuming the 90 days trading horizon ANT is expected to generate 6.68 times more return on investment than Red Robin. However, ANT is 6.68 times more volatile than Red Robin Gourmet. It trades about 0.17 of its potential returns per unit of risk. Red Robin Gourmet is currently generating about 0.1 per unit of risk. If you would invest  63.00  in ANT on October 9, 2024 and sell it today you would earn a total of  84.00  from holding ANT or generate 133.33% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Weak
Accuracy	92.86%
Values	Daily Returns

ANT  vs.  Red Robin Gourmet

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.

Red Robin Gourmet

Risk-Adjusted Performance

7 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Red Robin Gourmet are ranked lower than 7 (%) of all global equities and portfolios over the last 90 days. Despite somewhat unfluctuating technical and fundamental indicators, Red Robin sustained solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with ANT and Red Robin

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

The idea behind ANT and Red Robin Gourmet 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 Sign In To Macroaxis module to sign in to explore Macroaxis' wealth optimization platform and fintech modules.