Correlation Between ANT and Hennessy Stance

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

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

Diversification Opportunities for ANT and Hennessy Stance

0.0

Correlation Coefficient

ANT  Hennessy Stance

Pay attention - limited upside

The 3 months correlation between ANT and Hennessy is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding ANT and Hennessy Stance ESG in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Hennessy Stance ESG 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 Hennessy Stance. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Hennessy Stance ESG has no effect on the direction of ANT i.e., ANT and Hennessy Stance go up and down completely randomly.

Pair Corralation between ANT and Hennessy Stance

Assuming the 90 days trading horizon ANT is expected to generate 79.98 times more return on investment than Hennessy Stance. However, ANT is 79.98 times more volatile than Hennessy Stance ESG. It trades about 0.16 of its potential returns per unit of risk. Hennessy Stance ESG is currently generating about 0.05 per unit of risk. If you would invest  147.00  in ANT on October 27, 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	Flat
Strength	Insignificant
Accuracy	93.75%
Values	Daily Returns

ANT  vs.  Hennessy Stance ESG

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.

Hennessy Stance ESG

Risk-Adjusted Performance

4 of 100

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in Hennessy Stance ESG are ranked lower than 4 (%) of all global equities and portfolios over the last 90 days. In spite of rather sound basic indicators, Hennessy Stance is not utilizing all of its potentials. The recent stock price tumult, may contribute to shorter-term losses for the shareholders.

Pair Trading with ANT and Hennessy Stance

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

The idea behind ANT and Hennessy Stance ESG 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 Diagnostics module to use generated alerts and portfolio events aggregator to diagnose current holdings.