Correlation Between ANTA SPORTS and Alphabet

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

Diversification Opportunities for ANTA SPORTS and Alphabet

-0.37

Correlation Coefficient

ANTA SPORTS  Alphabet

Very good diversification

The 3 months correlation between ANTA and Alphabet is -0.37. Overlapping area represents the amount of risk that can be diversified away by holding ANTA SPORTS PRODUCT and Alphabet Class A in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Alphabet Class A 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 Alphabet. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Alphabet Class A has no effect on the direction of ANTA SPORTS i.e., ANTA SPORTS and Alphabet go up and down completely randomly.

Pair Corralation between ANTA SPORTS and Alphabet

Assuming the 90 days trading horizon ANTA SPORTS is expected to generate 2.53 times less return on investment than Alphabet. In addition to that, ANTA SPORTS is 1.52 times more volatile than Alphabet Class A. It trades about 0.02 of its total potential returns per unit of risk. Alphabet Class A is currently generating about 0.1 per unit of volatility. If you would invest  8,170  in Alphabet Class A on September 29, 2024 and sell it today you would earn a total of  10,336  from holding Alphabet Class A or generate 126.51% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Insignificant
Accuracy	99.8%
Values	Daily Returns

ANTA SPORTS PRODUCT  vs.  Alphabet Class A

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 uncertain 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.

Alphabet Class A

Risk-Adjusted Performance

15 of 100

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in Alphabet Class A are ranked lower than 15 (%) of all global equities and portfolios over the last 90 days. Despite nearly fragile technical and fundamental indicators, Alphabet reported solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with ANTA SPORTS and Alphabet

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

The idea behind ANTA SPORTS PRODUCT and Alphabet Class A 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 Holdings module to check your current holdings and cash postion to detemine if your portfolio needs rebalancing.