Correlation Between Ethena and ANT

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

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

Diversification Opportunities for Ethena and ANT

-0.52

Correlation Coefficient

Ethena  ANT

Excellent diversification

The 3 months correlation between Ethena and ANT is -0.52. Overlapping area represents the amount of risk that can be diversified away by holding Ethena and ANT in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on ANT and Ethena 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 Ethena are associated (or correlated) with ANT. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of ANT has no effect on the direction of Ethena i.e., Ethena and ANT go up and down completely randomly.

Pair Corralation between Ethena and ANT

Assuming the 90 days trading horizon Ethena is expected to generate 9.47 times less return on investment than ANT. But when comparing it to its historical volatility, Ethena is 12.75 times less risky than ANT. It trades about 0.26 of its potential returns per unit of risk. ANT is currently generating about 0.19 of returns per unit of risk over similar time horizon. If you would invest  624.00  in ANT on September 1, 2024 and sell it today you would lose (477.00) from holding ANT or give up 76.44% of portfolio value over 90 days.

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

Ethena  vs.  ANT

Ethena

Risk-Adjusted Performance

20 of 100

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in Ethena are ranked lower than 20 (%) of all global equities and portfolios over the last 90 days. In spite of rather unsteady basic indicators, Ethena exhibited solid returns over the last few months and may actually be approaching a breakup point.

ANT

Risk-Adjusted Performance

15 of 100

Good

Compared to the overall equity markets, risk-adjusted returns on investments in ANT are ranked lower than 15 (%) of all global equities and portfolios over the last 90 days. In spite of rather unsteady basic indicators, ANT exhibited solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Ethena and ANT

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

The idea behind Ethena and ANT 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 Earnings Calls module to check upcoming earnings announcements updated hourly across public exchanges.