Correlation Between ANT and FFW
Can any of the company-specific risk be diversified away by investing in both ANT and FFW 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 FFW into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between ANT and FFW Corporation, you can compare the effects of market volatilities on ANT and FFW 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 FFW. Check out your portfolio center. Please also check ongoing floating volatility patterns of ANT and FFW.
Diversification Opportunities for ANT and FFW
Very good diversification
The 3 months correlation between ANT and FFW is -0.22. Overlapping area represents the amount of risk that can be diversified away by holding ANT and FFW Corp. in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on FFW Corporation 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 FFW. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of FFW Corporation has no effect on the direction of ANT i.e., ANT and FFW go up and down completely randomly.
Pair Corralation between ANT and FFW
Assuming the 90 days trading horizon ANT is expected to generate 17.01 times more return on investment than FFW. However, ANT is 17.01 times more volatile than FFW Corporation. It trades about 0.1 of its potential returns per unit of risk. FFW Corporation is currently generating about 0.01 per unit of risk. If you would invest 321.00 in ANT on October 21, 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 Against |
| Strength | Insignificant |
| Accuracy | 81.69% |
| Values | Daily Returns |
ANT vs. FFW Corp.
Performance |
| Timeline |
| ANT |
| FFW Corporation |
ANT and FFW Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with ANT and FFW
The main advantage of trading using opposite ANT and FFW positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if ANT position performs unexpectedly, FFW 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 FFW will offset losses from the drop in FFW's long position.The idea behind ANT and FFW Corporation 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.| FFW vs. First Farmers Financial | FFW vs. Farmers Merchants Bancorp | FFW vs. Lakeland Financial | FFW vs. Eagle Financial Services |
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 Price Ceiling Movement module to calculate and plot Price Ceiling Movement for different equity instruments.
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