Correlation Between ANTA SPORTS and Chegg

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

By analyzing existing cross correlation between ANTA SPORTS PRODUCT and Chegg Inc, you can compare the effects of market volatilities on ANTA SPORTS and Chegg 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 ANTA SPORTS with a short position of Chegg. Check out your portfolio center. Please also check ongoing floating volatility patterns of ANTA SPORTS and Chegg.

Diversification Opportunities for ANTA SPORTS and Chegg

-0.25

Correlation Coefficient

ANTA SPORTS  Chegg

Very good diversification

The 3 months correlation between ANTA and Chegg is -0.25. Overlapping area represents the amount of risk that can be diversified away by holding ANTA SPORTS PRODUCT and Chegg Inc in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Chegg Inc and ANTA SPORTS 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 ANTA SPORTS PRODUCT are associated (or correlated) with Chegg. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Chegg Inc has no effect on the direction of ANTA SPORTS i.e., ANTA SPORTS and Chegg go up and down completely randomly.

Pair Corralation between ANTA SPORTS and Chegg

Assuming the 90 days trading horizon ANTA SPORTS PRODUCT is expected to generate 0.59 times more return on investment than Chegg. However, ANTA SPORTS PRODUCT is 1.69 times less risky than Chegg. It trades about 0.02 of its potential returns per unit of risk. Chegg Inc is currently generating about -0.08 per unit of risk. If you would invest  875.00  in ANTA SPORTS PRODUCT on October 26, 2024 and sell it today you would earn a total of  119.00  from holding ANTA SPORTS PRODUCT or generate 13.6% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Insignificant
Accuracy	100.0%
Values	Daily Returns

ANTA SPORTS PRODUCT  vs.  Chegg Inc

ANTA SPORTS PRODUCT

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days ANTA SPORTS PRODUCT has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of latest fragile performance, the Stock's basic indicators remain sound and the latest tumult on Wall Street may also be a sign of longer-term gains for the firm shareholders.

Chegg Inc

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Chegg Inc has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of comparatively stable basic indicators, Chegg is not utilizing all of its potentials. The current stock price uproar, may contribute to short-horizon losses for the private investors.

Pair Trading with ANTA SPORTS and Chegg

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

The idea behind ANTA SPORTS PRODUCT and Chegg Inc 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 Idea Analyzer module to analyze all characteristics, volatility and risk-adjusted return of Macroaxis ideas.