Correlation Between ANT and Alps/smith Short

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

By analyzing existing cross correlation between ANT and Alpssmith Short Duration, you can compare the effects of market volatilities on ANT and Alps/smith Short 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 Alps/smith Short. Check out your portfolio center. Please also check ongoing floating volatility patterns of ANT and Alps/smith Short.

Diversification Opportunities for ANT and Alps/smith Short

0.01

Correlation Coefficient

ANT  Alps/smith Short

Significant diversification

The 3 months correlation between ANT and Alps/smith is 0.01. Overlapping area represents the amount of risk that can be diversified away by holding ANT and Alpssmith Short Duration in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Alpssmith Short Duration 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 Alps/smith Short. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Alpssmith Short Duration has no effect on the direction of ANT i.e., ANT and Alps/smith Short go up and down completely randomly.

Pair Corralation between ANT and Alps/smith Short

Assuming the 90 days trading horizon ANT is expected to generate 511.02 times more return on investment than Alps/smith Short. However, ANT is 511.02 times more volatile than Alpssmith Short Duration. It trades about 0.1 of its potential returns per unit of risk. Alpssmith Short Duration is currently generating about 0.16 per unit of risk. If you would invest  307.00  in ANT on October 27, 2024 and sell it today you would lose (160.00) from holding ANT or give up 52.12% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Insignificant
Accuracy	60.32%
Values	Daily Returns

ANT  vs.  Alpssmith Short Duration

ANT

Risk-Adjusted Performance

12 of 100

Good

Compared to the overall equity markets, risk-adjusted returns on investments in ANT are ranked lower than 12 (%) 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.

Alpssmith Short Duration

Risk-Adjusted Performance

9 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Alpssmith Short Duration are ranked lower than 9 (%) of all funds and portfolios of funds over the last 90 days. In spite of fairly strong basic indicators, Alps/smith Short is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

Pair Trading with ANT and Alps/smith Short

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

The idea behind ANT and Alpssmith Short Duration 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 FinTech Suite module to use AI to screen and filter profitable investment opportunities.