Correlation Between LION ONE and ANTA SPORTS

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

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

Diversification Opportunities for LION ONE and ANTA SPORTS

0.48

Correlation Coefficient

LION ONE  ANTA SPORTS

Very weak diversification

The 3 months correlation between LION and ANTA is 0.48. Overlapping area represents the amount of risk that can be diversified away by holding LION ONE METALS and ANTA SPORTS PRODUCT in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on ANTA SPORTS PRODUCT and LION ONE 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 LION ONE METALS 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 PRODUCT has no effect on the direction of LION ONE i.e., LION ONE and ANTA SPORTS go up and down completely randomly.

Pair Corralation between LION ONE and ANTA SPORTS

Assuming the 90 days trading horizon LION ONE is expected to generate 3.95 times less return on investment than ANTA SPORTS. But when comparing it to its historical volatility, LION ONE METALS is 1.09 times less risky than ANTA SPORTS. It trades about 0.02 of its potential returns per unit of risk. ANTA SPORTS PRODUCT is currently generating about 0.07 of returns per unit of risk over similar time horizon. If you would invest  839.00  in ANTA SPORTS PRODUCT on September 10, 2024 and sell it today you would earn a total of  124.00  from holding ANTA SPORTS PRODUCT or generate 14.78% return on investment over 90 days.

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

LION ONE METALS  vs.  ANTA SPORTS PRODUCT

LION ONE METALS

Risk-Adjusted Performance

1 of 100

Weak

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

ANTA SPORTS PRODUCT

Risk-Adjusted Performance

5 of 100

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in ANTA SPORTS PRODUCT are ranked lower than 5 (%) of all global equities and portfolios over the last 90 days. In spite of rather unsteady basic indicators, ANTA SPORTS exhibited solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with LION ONE and ANTA SPORTS

The main advantage of trading using opposite LION ONE and ANTA SPORTS positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if LION ONE 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's long position.

The idea behind LION ONE METALS and ANTA SPORTS PRODUCT 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 Analyst Advice module to analyst recommendations and target price estimates broken down by several categories.