Correlation Between ANT and AMERICAN POTASH

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Can any of the company-specific risk be diversified away by investing in both ANT and AMERICAN POTASH 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 AMERICAN POTASH into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between ANT and AMERICAN POTASH P, you can compare the effects of market volatilities on ANT and AMERICAN POTASH 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 AMERICAN POTASH. Check out your portfolio center. Please also check ongoing floating volatility patterns of ANT and AMERICAN POTASH.

Diversification Opportunities for ANT and AMERICAN POTASH

0.12
  Correlation Coefficient

Average diversification

The 3 months correlation between ANT and AMERICAN is 0.12. Overlapping area represents the amount of risk that can be diversified away by holding ANT and AMERICAN POTASH P in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on AMERICAN POTASH P 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 AMERICAN POTASH. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of AMERICAN POTASH P has no effect on the direction of ANT i.e., ANT and AMERICAN POTASH go up and down completely randomly.

Pair Corralation between ANT and AMERICAN POTASH

Assuming the 90 days trading horizon ANT is expected to generate 1.33 times less return on investment than AMERICAN POTASH. In addition to that, ANT is 1.62 times more volatile than AMERICAN POTASH P. It trades about 0.07 of its total potential returns per unit of risk. AMERICAN POTASH P is currently generating about 0.16 per unit of volatility. If you would invest  11.00  in AMERICAN POTASH P on October 15, 2024 and sell it today you would earn a total of  2.00  from holding AMERICAN POTASH P or generate 18.18% return on investment over 90 days.
Time Period3 Months [change]
DirectionMoves Together 
StrengthInsignificant
Accuracy75.0%
ValuesDaily Returns

ANT  vs.  AMERICAN POTASH P

 Performance 
       Timeline  
ANT 

Risk-Adjusted Performance

16 of 100

 
Weak
 
Strong
Solid
Compared to the overall equity markets, risk-adjusted returns on investments in ANT are ranked lower than 16 (%) of all global equities and portfolios over the last 90 days. In spite of rather unsteady basic indicators, ANT exhibited solid returns over the last few months and may actually be approaching a breakup point.
AMERICAN POTASH P 

Risk-Adjusted Performance

2 of 100

 
Weak
 
Strong
Insignificant
Compared to the overall equity markets, risk-adjusted returns on investments in AMERICAN POTASH P are ranked lower than 2 (%) of all global equities and portfolios over the last 90 days. Despite nearly uncertain basic indicators, AMERICAN POTASH reported solid returns over the last few months and may actually be approaching a breakup point.

ANT and AMERICAN POTASH Volatility Contrast

   Predicted Return Density   
       Returns  

Pair Trading with ANT and AMERICAN POTASH

The main advantage of trading using opposite ANT and AMERICAN POTASH positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if ANT position performs unexpectedly, AMERICAN POTASH 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 AMERICAN POTASH will offset losses from the drop in AMERICAN POTASH's long position.
The idea behind ANT and AMERICAN POTASH P 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 Piotroski F Score module to get Piotroski F Score based on the binary analysis strategy of nine different fundamentals.

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