Correlation Between ANTA SPORTS and UPDATE SOFTWARE

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

Diversification Opportunities for ANTA SPORTS and UPDATE SOFTWARE

-0.45

Correlation Coefficient

ANTA SPORTS  UPDATE SOFTWARE

Very good diversification

The 3 months correlation between ANTA and UPDATE is -0.45. Overlapping area represents the amount of risk that can be diversified away by holding ANTA SPORTS PRODUCT and UPDATE SOFTWARE in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on UPDATE SOFTWARE 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 UPDATE SOFTWARE. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of UPDATE SOFTWARE has no effect on the direction of ANTA SPORTS i.e., ANTA SPORTS and UPDATE SOFTWARE go up and down completely randomly.

Pair Corralation between ANTA SPORTS and UPDATE SOFTWARE

Assuming the 90 days trading horizon ANTA SPORTS PRODUCT is expected to generate 0.77 times more return on investment than UPDATE SOFTWARE. However, ANTA SPORTS PRODUCT is 1.29 times less risky than UPDATE SOFTWARE. It trades about -0.08 of its potential returns per unit of risk. UPDATE SOFTWARE is currently generating about -0.14 per unit of risk. If you would invest  985.00  in ANTA SPORTS PRODUCT on October 26, 2024 and sell it today you would lose (29.00) from holding ANTA SPORTS PRODUCT or give up 2.94% of portfolio value over 90 days.

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

ANTA SPORTS PRODUCT  vs.  UPDATE SOFTWARE

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.

UPDATE SOFTWARE

Risk-Adjusted Performance

13 of 100

Good

Compared to the overall equity markets, risk-adjusted returns on investments in UPDATE SOFTWARE are ranked lower than 13 (%) of all global equities and portfolios over the last 90 days. In spite of rather uncertain basic indicators, UPDATE SOFTWARE exhibited solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with ANTA SPORTS and UPDATE SOFTWARE

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

The idea behind ANTA SPORTS PRODUCT and UPDATE SOFTWARE 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 File Import module to quickly import all of your third-party portfolios from your local drive in csv format.