Correlation Between UNITED UTILITIES and ANTA SPORTS

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

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

Diversification Opportunities for UNITED UTILITIES and ANTA SPORTS

-0.69

Correlation Coefficient

UNITED UTILITIES  ANTA SPORTS

Excellent diversification

The 3 months correlation between UNITED and ANTA is -0.69. Overlapping area represents the amount of risk that can be diversified away by holding UNITED UTILITIES GR 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 UNITED UTILITIES 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 UNITED UTILITIES GR 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 UNITED UTILITIES i.e., UNITED UTILITIES and ANTA SPORTS go up and down completely randomly.

Pair Corralation between UNITED UTILITIES and ANTA SPORTS

Assuming the 90 days trading horizon UNITED UTILITIES is expected to generate 5.3 times less return on investment than ANTA SPORTS. But when comparing it to its historical volatility, UNITED UTILITIES GR is 2.4 times less risky than ANTA SPORTS. It trades about 0.04 of its potential returns per unit of risk. ANTA SPORTS PRODUCT is currently generating about 0.08 of returns per unit of risk over similar time horizon. If you would invest  724.00  in ANTA SPORTS PRODUCT on October 4, 2024 and sell it today you would earn a total of  233.00  from holding ANTA SPORTS PRODUCT or generate 32.18% return on investment over 90 days.

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

UNITED UTILITIES GR  vs.  ANTA SPORTS PRODUCT

UNITED UTILITIES

Risk-Adjusted Performance

5 of 100

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in UNITED UTILITIES GR are ranked lower than 5 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively stable basic indicators, UNITED UTILITIES is not utilizing all of its potentials. The newest stock price uproar, may contribute to short-horizon losses for the private investors.

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 uncertain performance in the last few months, the Stock's basic indicators remain rather sound which may send shares a bit higher in February 2025. The latest tumult may also be a sign of longer-term up-swing for the firm shareholders.

Pair Trading with UNITED UTILITIES and ANTA SPORTS

The main advantage of trading using opposite UNITED UTILITIES and ANTA SPORTS positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if UNITED UTILITIES 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 UNITED UTILITIES GR 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 Stock Tickers module to use high-impact, comprehensive, and customizable stock tickers that can be easily integrated to any websites.