Correlation Between Booking Holdings and ANTA Sports

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Can any of the company-specific risk be diversified away by investing in both Booking Holdings 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 Booking Holdings and ANTA Sports into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Booking Holdings and ANTA Sports Products, you can compare the effects of market volatilities on Booking Holdings 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 Booking Holdings with a short position of ANTA Sports. Check out your portfolio center. Please also check ongoing floating volatility patterns of Booking Holdings and ANTA Sports.

Diversification Opportunities for Booking Holdings and ANTA Sports

-0.34
  Correlation Coefficient

Very good diversification

The 3 months correlation between Booking and ANTA is -0.34. Overlapping area represents the amount of risk that can be diversified away by holding Booking Holdings 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 Booking Holdings 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 Booking Holdings 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 Booking Holdings i.e., Booking Holdings and ANTA Sports go up and down completely randomly.

Pair Corralation between Booking Holdings and ANTA Sports

Assuming the 90 days trading horizon Booking Holdings is expected to under-perform the ANTA Sports. But the stock apears to be less risky and, when comparing its historical volatility, Booking Holdings is 2.28 times less risky than ANTA Sports. The stock trades about -0.08 of its potential returns per unit of risk. The ANTA Sports Products is currently generating about 0.03 of returns per unit of risk over similar time horizon. If you would invest  956.00  in ANTA Sports Products on September 23, 2024 and sell it today you would earn a total of  7.00  from holding ANTA Sports Products or generate 0.73% return on investment over 90 days.
Time Period3 Months [change]
DirectionMoves Against 
StrengthInsignificant
Accuracy100.0%
ValuesDaily Returns

Booking Holdings  vs.  ANTA Sports Products

 Performance 
       Timeline  
Booking Holdings 

Risk-Adjusted Performance

21 of 100

 
Weak
 
Strong
Solid
Compared to the overall equity markets, risk-adjusted returns on investments in Booking Holdings are ranked lower than 21 (%) of all global equities and portfolios over the last 90 days. Despite nearly fragile technical and fundamental indicators, Booking Holdings reported solid returns over the last few months and may actually be approaching a breakup point.
ANTA Sports Products 

Risk-Adjusted Performance

5 of 100

 
Weak
 
Strong
Modest
Compared to the overall equity markets, risk-adjusted returns on investments in ANTA Sports Products are ranked lower than 5 (%) of all global equities and portfolios over the last 90 days. Despite nearly fragile basic indicators, ANTA Sports reported solid returns over the last few months and may actually be approaching a breakup point.

Booking Holdings and ANTA Sports Volatility Contrast

   Predicted Return Density   
       Returns  

Pair Trading with Booking Holdings and ANTA Sports

The main advantage of trading using opposite Booking Holdings and ANTA Sports positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Booking Holdings 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 Booking Holdings 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 Bollinger Bands module to use Bollinger Bands indicator to analyze target price for a given investing horizon.

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