Correlation Between Definitive Healthcare and ANTA Sports

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

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

Diversification Opportunities for Definitive Healthcare and ANTA Sports

-0.53

Correlation Coefficient

Definitive Healthcare  ANTA Sports

Excellent diversification

The 3 months correlation between Definitive and ANTA is -0.53. Overlapping area represents the amount of risk that can be diversified away by holding Definitive Healthcare Corp 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 Definitive Healthcare 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 Definitive Healthcare Corp 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 Definitive Healthcare i.e., Definitive Healthcare and ANTA Sports go up and down completely randomly.

Pair Corralation between Definitive Healthcare and ANTA Sports

Allowing for the 90-day total investment horizon Definitive Healthcare Corp is expected to under-perform the ANTA Sports. In addition to that, Definitive Healthcare is 2.97 times more volatile than ANTA Sports Products. It trades about -0.08 of its total potential returns per unit of risk. ANTA Sports Products is currently generating about 0.2 per unit of volatility. If you would invest  25,960  in ANTA Sports Products on December 20, 2024 and sell it today you would earn a total of  6,738  from holding ANTA Sports Products or generate 25.96% return on investment over 90 days.

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

Definitive Healthcare Corp  vs.  ANTA Sports Products

Definitive Healthcare

Risk-Adjusted Performance

Very Weak

Over the last 90 days Definitive Healthcare Corp has generated negative risk-adjusted returns adding no value to investors with long positions. Despite weak performance in the last few months, the Stock's technical indicators remain fairly strong which may send shares a bit higher in April 2025. The recent confusion may also be a sign of long-lasting up-swing for the firm traders.

ANTA Sports Products

Risk-Adjusted Performance

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in ANTA Sports Products are ranked lower than 16 (%) of all global equities and portfolios over the last 90 days. In spite of fairly weak fundamental indicators, ANTA Sports showed solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Definitive Healthcare and ANTA Sports

The main advantage of trading using opposite Definitive Healthcare and ANTA Sports positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Definitive Healthcare 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 Definitive Healthcare Corp 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 Companies Directory module to evaluate performance of over 100,000 Stocks, Funds, and ETFs against different fundamentals.