Correlation Between ANT and SWISS WATER
Can any of the company-specific risk be diversified away by investing in both ANT and SWISS WATER 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 SWISS WATER into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between ANT and SWISS WATER DECAFFCOFFEE, you can compare the effects of market volatilities on ANT and SWISS WATER 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 SWISS WATER. Check out your portfolio center. Please also check ongoing floating volatility patterns of ANT and SWISS WATER.
Diversification Opportunities for ANT and SWISS WATER
0.09 | Correlation Coefficient |
Significant diversification
The 3 months correlation between ANT and SWISS is 0.09. Overlapping area represents the amount of risk that can be diversified away by holding ANT and SWISS WATER DECAFFCOFFEE in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on SWISS WATER DECAFFCOFFEE 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 SWISS WATER. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of SWISS WATER DECAFFCOFFEE has no effect on the direction of ANT i.e., ANT and SWISS WATER go up and down completely randomly.
Pair Corralation between ANT and SWISS WATER
Assuming the 90 days trading horizon ANT is expected to generate 22.34 times more return on investment than SWISS WATER. However, ANT is 22.34 times more volatile than SWISS WATER DECAFFCOFFEE. It trades about 0.1 of its potential returns per unit of risk. SWISS WATER DECAFFCOFFEE is currently generating about 0.03 per unit of risk. If you would invest 321.00 in ANT on October 20, 2024 and sell it today you would lose (174.00) from holding ANT or give up 54.21% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 59.48% |
| Values | Daily Returns |
ANT vs. SWISS WATER DECAFFCOFFEE
Performance |
| Timeline |
| ANT |
| SWISS WATER DECAFFCOFFEE |
ANT and SWISS WATER Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with ANT and SWISS WATER
The main advantage of trading using opposite ANT and SWISS WATER positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if ANT position performs unexpectedly, SWISS WATER 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 SWISS WATER will offset losses from the drop in SWISS WATER's long position.The idea behind ANT and SWISS WATER DECAFFCOFFEE 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.| SWISS WATER vs. COSTCO WHOLESALE CDR | SWISS WATER vs. Apollo Investment Corp | SWISS WATER vs. HK Electric Investments | SWISS WATER vs. Caseys General Stores |
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 Theme Ratings module to determine theme ratings based on digital equity recommendations. Macroaxis theme ratings are based on combination of fundamental analysis and risk-adjusted market performance.
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