Correlation Between ANT and Deutsche Gold

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

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

Diversification Opportunities for ANT and Deutsche Gold

-0.09

Correlation Coefficient

ANT  Deutsche Gold

Good diversification

The 3 months correlation between ANT and Deutsche is -0.09. Overlapping area represents the amount of risk that can be diversified away by holding ANT and Deutsche Gold Precious in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Deutsche Gold Precious 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 Deutsche Gold. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Deutsche Gold Precious has no effect on the direction of ANT i.e., ANT and Deutsche Gold go up and down completely randomly.

Pair Corralation between ANT and Deutsche Gold

Assuming the 90 days trading horizon ANT is expected to generate 12.16 times more return on investment than Deutsche Gold. However, ANT is 12.16 times more volatile than Deutsche Gold Precious. It trades about 0.08 of its potential returns per unit of risk. Deutsche Gold Precious is currently generating about 0.24 per unit of risk. If you would invest  147.00  in ANT on December 21, 2024 and sell it today you would earn a total of  0.00  from holding ANT or generate 0.0% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Insignificant
Accuracy	93.65%
Values	Daily Returns

ANT  vs.  Deutsche Gold Precious

ANT

Risk-Adjusted Performance

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in ANT are ranked lower than 6 (%) 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.

Deutsche Gold Precious

Risk-Adjusted Performance

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in Deutsche Gold Precious are ranked lower than 18 (%) of all funds and portfolios of funds over the last 90 days. In spite of fairly weak forward indicators, Deutsche Gold showed solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with ANT and Deutsche Gold

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

The idea behind ANT and Deutsche Gold Precious 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 Performance Analysis module to check effects of mean-variance optimization against your current asset allocation.