Correlation Between SWISS WATER and ANTA SPORTS
Can any of the company-specific risk be diversified away by investing in both SWISS WATER 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 SWISS WATER and ANTA SPORTS into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between SWISS WATER DECAFFCOFFEE and ANTA SPORTS PRODUCT, you can compare the effects of market volatilities on SWISS WATER 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 SWISS WATER with a short position of ANTA SPORTS. Check out your portfolio center. Please also check ongoing floating volatility patterns of SWISS WATER and ANTA SPORTS.
Diversification Opportunities for SWISS WATER and ANTA SPORTS
0.5 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between SWISS and ANTA is 0.5. Overlapping area represents the amount of risk that can be diversified away by holding SWISS WATER DECAFFCOFFEE 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 SWISS WATER 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 SWISS WATER DECAFFCOFFEE 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 SWISS WATER i.e., SWISS WATER and ANTA SPORTS go up and down completely randomly.
Pair Corralation between SWISS WATER and ANTA SPORTS
Assuming the 90 days horizon SWISS WATER DECAFFCOFFEE is expected to generate 1.2 times more return on investment than ANTA SPORTS. However, SWISS WATER is 1.2 times more volatile than ANTA SPORTS PRODUCT. It trades about 0.08 of its potential returns per unit of risk. ANTA SPORTS PRODUCT is currently generating about -0.22 per unit of risk. If you would invest 262.00 in SWISS WATER DECAFFCOFFEE on August 27, 2024 and sell it today you would earn a total of 10.00 from holding SWISS WATER DECAFFCOFFEE or generate 3.82% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
SWISS WATER DECAFFCOFFEE vs. ANTA SPORTS PRODUCT
Performance |
| Timeline |
| SWISS WATER DECAFFCOFFEE |
| ANTA SPORTS PRODUCT |
SWISS WATER and ANTA SPORTS Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with SWISS WATER and ANTA SPORTS
The main advantage of trading using opposite SWISS WATER and ANTA SPORTS positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if SWISS WATER 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.| SWISS WATER vs. Superior Plus Corp | SWISS WATER vs. NMI Holdings | SWISS WATER vs. Origin Agritech | SWISS WATER vs. SIVERS SEMICONDUCTORS AB |
| ANTA SPORTS vs. Apple Inc | ANTA SPORTS vs. Apple Inc | ANTA SPORTS vs. Apple Inc | ANTA SPORTS vs. Microsoft |
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 Risk-Return Analysis module to view associations between returns expected from investment and the risk you assume.
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