Correlation Between Bill and ANTA Sports

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

By analyzing existing cross correlation between Bill Com Holdings and ANTA Sports Products, you can compare the effects of market volatilities on Bill and ANTA Sports 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 Bill with a short position of ANTA Sports. Check out your portfolio center. Please also check ongoing floating volatility patterns of Bill and ANTA Sports.

Diversification Opportunities for Bill and ANTA Sports

-0.69

Correlation Coefficient

Bill  ANTA Sports

Excellent diversification

The 3 months correlation between Bill and ANTA is -0.69. Overlapping area represents the amount of risk that can be diversified away by holding Bill Com Holdings and ANTA Sports Products in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on ANTA Sports Products and Bill 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 Bill Com Holdings are associated (or correlated) with ANTA Sports. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of ANTA Sports Products has no effect on the direction of Bill i.e., Bill and ANTA Sports go up and down completely randomly.

Pair Corralation between Bill and ANTA Sports

Given the investment horizon of 90 days Bill Com Holdings is expected to generate 1.08 times more return on investment than ANTA Sports. However, Bill is 1.08 times more volatile than ANTA Sports Products. It trades about 0.03 of its potential returns per unit of risk. ANTA Sports Products is currently generating about 0.03 per unit of risk. If you would invest  7,992  in Bill Com Holdings on October 24, 2024 and sell it today you would earn a total of  1,178  from holding Bill Com Holdings or generate 14.75% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Weak
Accuracy	99.6%
Values	Daily Returns

Bill Com Holdings  vs.  ANTA Sports Products

Bill Com Holdings

Risk-Adjusted Performance

19 of 100

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in Bill Com Holdings are ranked lower than 19 (%) of all global equities and portfolios over the last 90 days. Despite quite fragile essential indicators, Bill disclosed solid returns over the last few months and may actually be approaching a breakup point.

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. In spite of fairly strong fundamental indicators, ANTA Sports is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

Pair Trading with Bill and ANTA Sports

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

The idea behind Bill Com Holdings and ANTA Sports Products 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.