Correlation Between YETI Holdings and ANTA Sports

Can any of the company-specific risk be diversified away by investing in both YETI 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 YETI 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 YETI Holdings and ANTA Sports Products, you can compare the effects of market volatilities on YETI 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 YETI Holdings with a short position of ANTA Sports. Check out your portfolio center. Please also check ongoing floating volatility patterns of YETI Holdings and ANTA Sports.

Diversification Opportunities for YETI Holdings and ANTA Sports

0.1

Correlation Coefficient

YETI Holdings  ANTA Sports

Average diversification

The 3 months correlation between YETI and ANTA is 0.1. Overlapping area represents the amount of risk that can be diversified away by holding YETI 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 YETI 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 YETI 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 YETI Holdings i.e., YETI Holdings and ANTA Sports go up and down completely randomly.

Pair Corralation between YETI Holdings and ANTA Sports

Given the investment horizon of 90 days YETI Holdings is expected to under-perform the ANTA Sports. But the stock apears to be less risky and, when comparing its historical volatility, YETI Holdings is 1.74 times less risky than ANTA Sports. The stock trades about -0.06 of its potential returns per unit of risk. The ANTA Sports Products is currently generating about 0.09 of returns per unit of risk over similar time horizon. If you would invest  24,750  in ANTA Sports Products on September 24, 2024 and sell it today you would earn a total of  1,210  from holding ANTA Sports Products or generate 4.89% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Insignificant
Accuracy	95.24%
Values	Daily Returns

YETI Holdings  vs.  ANTA Sports Products

YETI Holdings

Risk-Adjusted Performance

1 of 100

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in YETI Holdings are ranked lower than 1 (%) of all global equities and portfolios over the last 90 days. Despite fairly strong basic indicators, YETI Holdings is not utilizing all of its potentials. The newest stock price confusion, may contribute to short-horizon losses for the traders.

ANTA Sports Products

Risk-Adjusted Performance

1 of 100

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in ANTA Sports Products are ranked lower than 1 (%) of all global equities and portfolios over the last 90 days. In spite of fairly strong fundamental indicators, ANTA Sports is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

Pair Trading with YETI Holdings and ANTA Sports

The main advantage of trading using opposite YETI Holdings and ANTA Sports positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if YETI 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 YETI 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 Content Syndication module to quickly integrate customizable finance content to your own investment portal.