Correlation Between Aniplus and Alton Sports
Can any of the company-specific risk be diversified away by investing in both Aniplus and Alton 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 Aniplus and Alton Sports into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Aniplus and Alton Sports CoLtd, you can compare the effects of market volatilities on Aniplus and Alton 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 Aniplus with a short position of Alton Sports. Check out your portfolio center. Please also check ongoing floating volatility patterns of Aniplus and Alton Sports.
Diversification Opportunities for Aniplus and Alton Sports
0.6 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Aniplus and Alton is 0.6. Overlapping area represents the amount of risk that can be diversified away by holding Aniplus and Alton Sports CoLtd in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Alton Sports CoLtd and Aniplus 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 Aniplus are associated (or correlated) with Alton Sports. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Alton Sports CoLtd has no effect on the direction of Aniplus i.e., Aniplus and Alton Sports go up and down completely randomly.
Pair Corralation between Aniplus and Alton Sports
Assuming the 90 days trading horizon Aniplus is expected to generate 1.98 times more return on investment than Alton Sports. However, Aniplus is 1.98 times more volatile than Alton Sports CoLtd. It trades about -0.1 of its potential returns per unit of risk. Alton Sports CoLtd is currently generating about -0.23 per unit of risk. If you would invest 289,000 in Aniplus on September 3, 2024 and sell it today you would lose (23,000) from holding Aniplus or give up 7.96% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Aniplus vs. Alton Sports CoLtd
Performance |
| Timeline |
| Aniplus |
| Alton Sports CoLtd |
Aniplus and Alton Sports Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Aniplus and Alton Sports
The main advantage of trading using opposite Aniplus and Alton Sports positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Aniplus position performs unexpectedly, Alton 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 Alton Sports will offset losses from the drop in Alton Sports' long position.| Aniplus vs. Innowireless Co | Aniplus vs. SK Chemicals Co | Aniplus vs. Kukdong Oil Chemicals | Aniplus vs. LG Chemicals |
| Alton Sports vs. Korea Information Communications | Alton Sports vs. Korean Reinsurance Co | Alton Sports vs. Lotte Non Life Insurance | Alton Sports vs. Sempio Foods Co |
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 Idea Optimizer module to use advanced portfolio builder with pre-computed micro ideas to build optimal portfolio .
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