Correlation Between ANTA SPORTS and Magna International

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

Diversification Opportunities for ANTA SPORTS and Magna International

-0.62

Correlation Coefficient

ANTA SPORTS  Magna International

Excellent diversification

The 3 months correlation between ANTA and Magna is -0.62. Overlapping area represents the amount of risk that can be diversified away by holding ANTA SPORTS PRODUCT and Magna International in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Magna International 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 Magna International. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Magna International has no effect on the direction of ANTA SPORTS i.e., ANTA SPORTS and Magna International go up and down completely randomly.

Pair Corralation between ANTA SPORTS and Magna International

Assuming the 90 days trading horizon ANTA SPORTS PRODUCT is expected to generate 2.93 times more return on investment than Magna International. However, ANTA SPORTS is 2.93 times more volatile than Magna International. It trades about 0.02 of its potential returns per unit of risk. Magna International is currently generating about -0.38 per unit of risk. If you would invest  947.00  in ANTA SPORTS PRODUCT on October 5, 2024 and sell it today you would earn a total of  3.00  from holding ANTA SPORTS PRODUCT or generate 0.32% 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.  Magna International

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 fragile performance in the last few months, the Stock's basic indicators remain rather sound which may send shares a bit higher in February 2025. The latest tumult may also be a sign of longer-term up-swing for the firm shareholders.

Magna International

Risk-Adjusted Performance

0 of 100

Modest

Over the last 90 days Magna International has generated negative risk-adjusted returns adding no value to investors with long positions. Despite nearly fragile basic indicators, Magna International may actually be approaching a critical reversion point that can send shares even higher in February 2025.

Pair Trading with ANTA SPORTS and Magna International

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

The idea behind ANTA SPORTS PRODUCT and Magna International 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 Portfolio Dashboard module to portfolio dashboard that provides centralized access to all your investments.