Correlation Between ANT and MG Credit
Can any of the company-specific risk be diversified away by investing in both ANT and MG Credit 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 MG Credit into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between ANT and MG Credit Income, you can compare the effects of market volatilities on ANT and MG Credit 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 MG Credit. Check out your portfolio center. Please also check ongoing floating volatility patterns of ANT and MG Credit.
Diversification Opportunities for ANT and MG Credit
Very good diversification
The 3 months correlation between ANT and MGCI is -0.29. Overlapping area represents the amount of risk that can be diversified away by holding ANT and MG Credit Income in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on MG Credit Income 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 MG Credit. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of MG Credit Income has no effect on the direction of ANT i.e., ANT and MG Credit go up and down completely randomly.
Pair Corralation between ANT and MG Credit
Assuming the 90 days trading horizon ANT is expected to generate 20.22 times more return on investment than MG Credit. However, ANT is 20.22 times more volatile than MG Credit Income. It trades about 0.13 of its potential returns per unit of risk. MG Credit Income is currently generating about -0.02 per unit of risk. If you would invest 120.00 in ANT on October 13, 2024 and sell it today you would earn a total of 27.00 from holding ANT or generate 22.5% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 90.48% |
| Values | Daily Returns |
ANT vs. MG Credit Income
Performance |
| Timeline |
| ANT |
| MG Credit Income |
ANT and MG Credit Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with ANT and MG Credit
The main advantage of trading using opposite ANT and MG Credit positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if ANT position performs unexpectedly, MG Credit 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 MG Credit will offset losses from the drop in MG Credit's long position.The idea behind ANT and MG Credit Income 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.| MG Credit vs. SupplyMe Capital PLC | MG Credit vs. SM Energy Co | MG Credit vs. FuelCell Energy | MG Credit vs. Grand Vision Media |
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 Volatility Analysis module to get historical volatility and risk analysis based on latest market data.
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