Correlation Between ANT and Pacific Construction
Can any of the company-specific risk be diversified away by investing in both ANT and Pacific Construction 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 ANT and Pacific Construction into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between ANT and Pacific Construction Co, you can compare the effects of market volatilities on ANT and Pacific Construction 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 ANT with a short position of Pacific Construction. Check out your portfolio center. Please also check ongoing floating volatility patterns of ANT and Pacific Construction.
Diversification Opportunities for ANT and Pacific Construction
-0.42 | Correlation Coefficient |
Very good diversification
The 3 months correlation between ANT and Pacific is -0.42. Overlapping area represents the amount of risk that can be diversified away by holding ANT and Pacific Construction Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Pacific Construction and ANT 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 ANT are associated (or correlated) with Pacific Construction. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Pacific Construction has no effect on the direction of ANT i.e., ANT and Pacific Construction go up and down completely randomly.
Pair Corralation between ANT and Pacific Construction
Assuming the 90 days trading horizon ANT is expected to generate 8.15 times more return on investment than Pacific Construction. However, ANT is 8.15 times more volatile than Pacific Construction Co. It trades about 0.09 of its potential returns per unit of risk. Pacific Construction Co is currently generating about 0.06 per unit of risk. If you would invest 147.00 in ANT on October 21, 2024 and sell it today you would earn a total of 0.00 from holding ANT or generate 0.0% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
ANT vs. Pacific Construction Co
Performance |
| Timeline |
| ANT |
| Pacific Construction |
ANT and Pacific Construction Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with ANT and Pacific Construction
The main advantage of trading using opposite ANT and Pacific Construction positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if ANT position performs unexpectedly, Pacific Construction 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 Pacific Construction will offset losses from the drop in Pacific Construction's long position.The idea behind ANT and Pacific Construction Co 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.| Pacific Construction vs. Cathay Real Estate | Pacific Construction vs. Goldsun Building Materials | Pacific Construction vs. Kindom Construction Corp | Pacific Construction vs. Prince Housing Development |
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 Equity Search module to search for actively traded equities including funds and ETFs from over 30 global markets.
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