Correlation Between Prestige Consumer and ANTA SPORTS

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

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

Diversification Opportunities for Prestige Consumer and ANTA SPORTS

-0.6

Correlation Coefficient

Prestige Consumer  ANTA SPORTS

Excellent diversification

The 3 months correlation between Prestige and ANTA is -0.6. Overlapping area represents the amount of risk that can be diversified away by holding Prestige Consumer Healthcare 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 Prestige Consumer 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 Prestige Consumer Healthcare 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 Prestige Consumer i.e., Prestige Consumer and ANTA SPORTS go up and down completely randomly.

Pair Corralation between Prestige Consumer and ANTA SPORTS

Assuming the 90 days horizon Prestige Consumer is expected to generate 1.79 times less return on investment than ANTA SPORTS. But when comparing it to its historical volatility, Prestige Consumer Healthcare is 2.47 times less risky than ANTA SPORTS. It trades about 0.1 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  762.00  in ANTA SPORTS PRODUCT on September 27, 2024 and sell it today you would earn a total of  220.00  from holding ANTA SPORTS PRODUCT or generate 28.87% return on investment over 90 days.

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

Prestige Consumer Healthcare  vs.  ANTA SPORTS PRODUCT

Prestige Consumer

Risk-Adjusted Performance

14 of 100

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Prestige Consumer Healthcare are ranked lower than 14 (%) of all global equities and portfolios over the last 90 days. Despite nearly unsteady basic indicators, Prestige Consumer reported solid returns over the last few months and may actually be approaching a breakup point.

ANTA SPORTS PRODUCT

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days ANTA SPORTS PRODUCT has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of rather sound basic indicators, ANTA SPORTS is not utilizing all of its potentials. The newest stock price tumult, may contribute to shorter-term losses for the shareholders.

Pair Trading with Prestige Consumer and ANTA SPORTS

The main advantage of trading using opposite Prestige Consumer and ANTA SPORTS positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Prestige Consumer 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 Prestige Consumer Healthcare 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.

Check out your portfolio center.

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 Global Markets Map module to get a quick overview of global market snapshot using zoomable world map. Drill down to check world indexes.