Correlation Between VanEck FTSE and Anatara Lifesciences

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

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

Diversification Opportunities for VanEck FTSE and Anatara Lifesciences

0.42

Correlation Coefficient

VanEck FTSE  Anatara Lifesciences

Very weak diversification

The 3 months correlation between VanEck and Anatara is 0.42. Overlapping area represents the amount of risk that can be diversified away by holding VanEck FTSE Global and Anatara Lifesciences in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Anatara Lifesciences and VanEck FTSE 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 VanEck FTSE Global are associated (or correlated) with Anatara Lifesciences. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Anatara Lifesciences has no effect on the direction of VanEck FTSE i.e., VanEck FTSE and Anatara Lifesciences go up and down completely randomly.

Pair Corralation between VanEck FTSE and Anatara Lifesciences

Assuming the 90 days trading horizon VanEck FTSE is expected to generate 10.65 times less return on investment than Anatara Lifesciences. But when comparing it to its historical volatility, VanEck FTSE Global is 6.49 times less risky than Anatara Lifesciences. It trades about 0.03 of its potential returns per unit of risk. Anatara Lifesciences is currently generating about 0.04 of returns per unit of risk over similar time horizon. If you would invest  3.66  in Anatara Lifesciences on October 23, 2024 and sell it today you would earn a total of  2.14  from holding Anatara Lifesciences or generate 58.47% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Weak
Accuracy	99.8%
Values	Daily Returns

VanEck FTSE Global  vs.  Anatara Lifesciences

VanEck FTSE Global

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days VanEck FTSE Global has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of comparatively stable basic indicators, VanEck FTSE is not utilizing all of its potentials. The current stock price uproar, may contribute to short-horizon losses for the private investors.

Anatara Lifesciences

Risk-Adjusted Performance

1 of 100

Very Weak

Compared to the overall equity markets, risk-adjusted returns on investments in Anatara Lifesciences are ranked lower than 1 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively stable basic indicators, Anatara Lifesciences is not utilizing all of its potentials. The newest stock price uproar, may contribute to short-horizon losses for the private investors.

Pair Trading with VanEck FTSE and Anatara Lifesciences

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

The idea behind VanEck FTSE Global and Anatara Lifesciences 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 Backtesting module to avoid under-diversification and over-optimization by backtesting your portfolios.