Correlation Between ANTA SPORTS and WW Grainger

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

Diversification Opportunities for ANTA SPORTS and WW Grainger

-0.61

Correlation Coefficient

ANTA SPORTS  WW Grainger

Excellent diversification

The 3 months correlation between ANTA and GWW is -0.61. Overlapping area represents the amount of risk that can be diversified away by holding ANTA SPORTS PRODUCT and WW Grainger in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on WW Grainger 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 WW Grainger. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of WW Grainger has no effect on the direction of ANTA SPORTS i.e., ANTA SPORTS and WW Grainger go up and down completely randomly.

Pair Corralation between ANTA SPORTS and WW Grainger

Assuming the 90 days trading horizon ANTA SPORTS is expected to generate 3.32 times less return on investment than WW Grainger. In addition to that, ANTA SPORTS is 1.79 times more volatile than WW Grainger. It trades about 0.02 of its total potential returns per unit of risk. WW Grainger is currently generating about 0.1 per unit of volatility. If you would invest  50,036  in WW Grainger on October 13, 2024 and sell it today you would earn a total of  53,514  from holding WW Grainger or generate 106.95% return on investment over 90 days.

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

ANTA SPORTS PRODUCT  vs.  WW Grainger

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.

WW Grainger

Risk-Adjusted Performance

4 of 100

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in WW Grainger are ranked lower than 4 (%) of all global equities and portfolios over the last 90 days. Despite nearly stable basic indicators, WW Grainger is not utilizing all of its potentials. The latest stock price disturbance, may contribute to mid-run losses for the stockholders.

Pair Trading with ANTA SPORTS and WW Grainger

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

The idea behind ANTA SPORTS PRODUCT and WW Grainger 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 Stock Screener module to find equities using a custom stock filter or screen asymmetry in trading patterns, price, volume, or investment outlook..