Correlation Between Yancoal Australia and ANTA SPORTS

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

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

Diversification Opportunities for Yancoal Australia and ANTA SPORTS

0.25

Correlation Coefficient

Yancoal Australia  ANTA SPORTS

Modest diversification

The 3 months correlation between Yancoal and ANTA is 0.25. Overlapping area represents the amount of risk that can be diversified away by holding Yancoal Australia 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 Yancoal Australia 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 Yancoal Australia 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 Yancoal Australia i.e., Yancoal Australia and ANTA SPORTS go up and down completely randomly.

Pair Corralation between Yancoal Australia and ANTA SPORTS

Assuming the 90 days trading horizon Yancoal Australia is expected to under-perform the ANTA SPORTS. In addition to that, Yancoal Australia is 1.01 times more volatile than ANTA SPORTS PRODUCT. It trades about -0.03 of its total potential returns per unit of risk. ANTA SPORTS PRODUCT is currently generating about -0.01 per unit of volatility. If you would invest  1,021  in ANTA SPORTS PRODUCT on October 25, 2024 and sell it today you would lose (31.00) from holding ANTA SPORTS PRODUCT or give up 3.04% of portfolio value over 90 days.

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

Yancoal Australia  vs.  ANTA SPORTS PRODUCT

Yancoal Australia

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Yancoal Australia has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of comparatively stable basic indicators, Yancoal Australia 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

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 current stock price tumult, may contribute to shorter-term losses for the shareholders.

Pair Trading with Yancoal Australia and ANTA SPORTS

The main advantage of trading using opposite Yancoal Australia and ANTA SPORTS positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Yancoal Australia 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 Yancoal Australia 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 Sectors module to list of equity sectors categorizing publicly traded companies based on their primary business activities.