Correlation Between ANT and MarketAxess Holdings
Can any of the company-specific risk be diversified away by investing in both ANT and MarketAxess Holdings 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 MarketAxess Holdings into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between ANT and MarketAxess Holdings, you can compare the effects of market volatilities on ANT and MarketAxess Holdings 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 MarketAxess Holdings. Check out your portfolio center. Please also check ongoing floating volatility patterns of ANT and MarketAxess Holdings.
Diversification Opportunities for ANT and MarketAxess Holdings
0.43 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between ANT and MarketAxess is 0.43. Overlapping area represents the amount of risk that can be diversified away by holding ANT and MarketAxess Holdings in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on MarketAxess Holdings 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 MarketAxess Holdings. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of MarketAxess Holdings has no effect on the direction of ANT i.e., ANT and MarketAxess Holdings go up and down completely randomly.
Pair Corralation between ANT and MarketAxess Holdings
Assuming the 90 days trading horizon ANT is expected to generate 21.72 times more return on investment than MarketAxess Holdings. However, ANT is 21.72 times more volatile than MarketAxess Holdings. It trades about 0.09 of its potential returns per unit of risk. MarketAxess Holdings is currently generating about -0.19 per unit of risk. If you would invest 147.00 in ANT on October 20, 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 Together |
| Strength | Weak |
| Accuracy | 90.91% |
| Values | Daily Returns |
ANT vs. MarketAxess Holdings
Performance |
| Timeline |
| ANT |
| MarketAxess Holdings |
ANT and MarketAxess Holdings Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with ANT and MarketAxess Holdings
The main advantage of trading using opposite ANT and MarketAxess Holdings positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if ANT position performs unexpectedly, MarketAxess Holdings 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 MarketAxess Holdings will offset losses from the drop in MarketAxess Holdings' long position.The idea behind ANT and MarketAxess Holdings 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.| MarketAxess Holdings vs. Interactive Brokers Group | MarketAxess Holdings vs. Evercore Partners | MarketAxess Holdings vs. PJT Partners | MarketAxess Holdings vs. LPL Financial Holdings |
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 Analyst Advice module to analyst recommendations and target price estimates broken down by several categories.
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