Correlation Between ANTA SPORTS and ZTE
Can any of the company-specific risk be diversified away by investing in both ANTA SPORTS and ZTE 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 ANTA SPORTS and ZTE into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between ANTA SPORTS PRODUCT and ZTE Corporation, you can compare the effects of market volatilities on ANTA SPORTS and ZTE 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 ANTA SPORTS with a short position of ZTE. Check out your portfolio center. Please also check ongoing floating volatility patterns of ANTA SPORTS and ZTE.
Diversification Opportunities for ANTA SPORTS and ZTE
0.75 | Correlation Coefficient |
Poor diversification
The 3 months correlation between ANTA and ZTE is 0.75. Overlapping area represents the amount of risk that can be diversified away by holding ANTA SPORTS PRODUCT and ZTE Corp. in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on ZTE Corporation and ANTA SPORTS 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 ANTA SPORTS PRODUCT are associated (or correlated) with ZTE. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of ZTE Corporation has no effect on the direction of ANTA SPORTS i.e., ANTA SPORTS and ZTE go up and down completely randomly.
Pair Corralation between ANTA SPORTS and ZTE
Assuming the 90 days trading horizon ANTA SPORTS is expected to generate 1.57 times less return on investment than ZTE. But when comparing it to its historical volatility, ANTA SPORTS PRODUCT is 1.43 times less risky than ZTE. It trades about 0.07 of its potential returns per unit of risk. ZTE Corporation is currently generating about 0.07 of returns per unit of risk over similar time horizon. If you would invest 124.00 in ZTE Corporation on September 12, 2024 and sell it today you would earn a total of 106.00 from holding ZTE Corporation or generate 85.48% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
ANTA SPORTS PRODUCT vs. ZTE Corp.
Performance |
| Timeline |
| ANTA SPORTS PRODUCT |
| ZTE Corporation |
ANTA SPORTS and ZTE Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with ANTA SPORTS and ZTE
The main advantage of trading using opposite ANTA SPORTS and ZTE positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if ANTA SPORTS position performs unexpectedly, ZTE 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 ZTE will offset losses from the drop in ZTE's long position.| ANTA SPORTS vs. Entravision Communications | ANTA SPORTS vs. Postal Savings Bank | ANTA SPORTS vs. HEMISPHERE EGY | ANTA SPORTS vs. Computershare Limited |
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 Equity Search module to search for actively traded equities including funds and ETFs from over 30 global markets.
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