Correlation Between ANTA SPORTS and WICKES GROUP

Can any of the company-specific risk be diversified away by investing in both ANTA SPORTS and WICKES GROUP 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 WICKES GROUP 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 WICKES GROUP PLC, you can compare the effects of market volatilities on ANTA SPORTS and WICKES GROUP 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 WICKES GROUP. Check out your portfolio center. Please also check ongoing floating volatility patterns of ANTA SPORTS and WICKES GROUP.

Diversification Opportunities for ANTA SPORTS and WICKES GROUP

0.56

Correlation Coefficient

ANTA SPORTS  WICKES GROUP

Very weak diversification

The 3 months correlation between ANTA and WICKES is 0.56. Overlapping area represents the amount of risk that can be diversified away by holding ANTA SPORTS PRODUCT and WICKES GROUP PLC in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on WICKES GROUP PLC 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 WICKES GROUP. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of WICKES GROUP PLC has no effect on the direction of ANTA SPORTS i.e., ANTA SPORTS and WICKES GROUP go up and down completely randomly.

Pair Corralation between ANTA SPORTS and WICKES GROUP

Assuming the 90 days trading horizon ANTA SPORTS is expected to generate 1.04 times less return on investment than WICKES GROUP. In addition to that, ANTA SPORTS is 1.22 times more volatile than WICKES GROUP PLC. It trades about 0.03 of its total potential returns per unit of risk. WICKES GROUP PLC is currently generating about 0.04 per unit of volatility. If you would invest  181.00  in WICKES GROUP PLC on October 27, 2024 and sell it today you would earn a total of  2.00  from holding WICKES GROUP PLC or generate 1.1% return on investment over 90 days.

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

ANTA SPORTS PRODUCT  vs.  WICKES GROUP PLC

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 rather sound basic indicators, ANTA SPORTS is not utilizing all of its potentials. The current stock price tumult, may contribute to shorter-term losses for the shareholders.

WICKES GROUP PLC

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days WICKES GROUP PLC has generated negative risk-adjusted returns adding no value to investors with long positions. Despite nearly stable basic indicators, WICKES GROUP is not utilizing all of its potentials. The current stock price disturbance, may contribute to mid-run losses for the stockholders.

Pair Trading with ANTA SPORTS and WICKES GROUP

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

The idea behind ANTA SPORTS PRODUCT and WICKES GROUP PLC 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 Bollinger Bands module to use Bollinger Bands indicator to analyze target price for a given investing horizon.