Correlation Between ANTA Sports and Regions Financial

Can any of the company-specific risk be diversified away by investing in both ANTA Sports and Regions Financial 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 Regions Financial into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between ANTA Sports Products and Regions Financial, you can compare the effects of market volatilities on ANTA Sports and Regions Financial 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 Regions Financial. Check out your portfolio center. Please also check ongoing floating volatility patterns of ANTA Sports and Regions Financial.

Diversification Opportunities for ANTA Sports and Regions Financial

-0.49

Correlation Coefficient

ANTA Sports  Regions Financial

Very good diversification

The 3 months correlation between ANTA and Regions is -0.49. Overlapping area represents the amount of risk that can be diversified away by holding ANTA Sports Products and Regions Financial in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Regions Financial 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 Products are associated (or correlated) with Regions Financial. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Regions Financial has no effect on the direction of ANTA Sports i.e., ANTA Sports and Regions Financial go up and down completely randomly.

Pair Corralation between ANTA Sports and Regions Financial

Assuming the 90 days horizon ANTA Sports Products is expected to under-perform the Regions Financial. In addition to that, ANTA Sports is 1.25 times more volatile than Regions Financial. It trades about -0.06 of its total potential returns per unit of risk. Regions Financial is currently generating about 0.03 per unit of volatility. If you would invest  2,218  in Regions Financial on October 7, 2024 and sell it today you would earn a total of  42.00  from holding Regions Financial or generate 1.89% return on investment over 90 days.

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

ANTA Sports Products  vs.  Regions Financial

ANTA Sports Products

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days ANTA Sports Products has generated negative risk-adjusted returns adding no value to investors with long positions. Despite fragile performance in the last few months, the Stock's basic indicators remain nearly stable which may send shares a bit higher in February 2025. The current disturbance may also be a sign of long-run up-swing for the company stockholders.

Regions Financial

Risk-Adjusted Performance

6 of 100

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in Regions Financial are ranked lower than 6 (%) of all global equities and portfolios over the last 90 days. Despite nearly unsteady basic indicators, Regions Financial may actually be approaching a critical reversion point that can send shares even higher in February 2025.

Pair Trading with ANTA Sports and Regions Financial

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

The idea behind ANTA Sports Products and Regions Financial 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 Risk-Return Analysis module to view associations between returns expected from investment and the risk you assume.