Correlation Between ANTA SPORTS and Goodyear Tire
Can any of the company-specific risk be diversified away by investing in both ANTA SPORTS and Goodyear Tire 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 Goodyear Tire 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 Goodyear Tire Rubber, you can compare the effects of market volatilities on ANTA SPORTS and Goodyear Tire 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 Goodyear Tire. Check out your portfolio center. Please also check ongoing floating volatility patterns of ANTA SPORTS and Goodyear Tire.
Diversification Opportunities for ANTA SPORTS and Goodyear Tire
0.19 | Correlation Coefficient |
Average diversification
The 3 months correlation between ANTA and Goodyear is 0.19. Overlapping area represents the amount of risk that can be diversified away by holding ANTA SPORTS PRODUCT and Goodyear Tire Rubber in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Goodyear Tire Rubber 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 Goodyear Tire. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Goodyear Tire Rubber has no effect on the direction of ANTA SPORTS i.e., ANTA SPORTS and Goodyear Tire go up and down completely randomly.
Pair Corralation between ANTA SPORTS and Goodyear Tire
Assuming the 90 days trading horizon ANTA SPORTS PRODUCT is expected to under-perform the Goodyear Tire. But the stock apears to be less risky and, when comparing its historical volatility, ANTA SPORTS PRODUCT is 1.55 times less risky than Goodyear Tire. The stock trades about -0.08 of its potential returns per unit of risk. The Goodyear Tire Rubber is currently generating about 0.46 of returns per unit of risk over similar time horizon. If you would invest 746.00 in Goodyear Tire Rubber on September 4, 2024 and sell it today you would earn a total of 296.00 from holding Goodyear Tire Rubber or generate 39.68% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 95.45% |
| Values | Daily Returns |
ANTA SPORTS PRODUCT vs. Goodyear Tire Rubber
Performance |
| Timeline |
| ANTA SPORTS PRODUCT |
| Goodyear Tire Rubber |
ANTA SPORTS and Goodyear Tire Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with ANTA SPORTS and Goodyear Tire
The main advantage of trading using opposite ANTA SPORTS and Goodyear Tire positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if ANTA SPORTS position performs unexpectedly, Goodyear Tire 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 Goodyear Tire will offset losses from the drop in Goodyear Tire's long position.| ANTA SPORTS vs. ECHO INVESTMENT ZY | ANTA SPORTS vs. SLR Investment Corp | ANTA SPORTS vs. Wyndham Hotels Resorts | ANTA SPORTS vs. Pembina Pipeline Corp |
| Goodyear Tire vs. Apple Inc | Goodyear Tire vs. Apple Inc | Goodyear Tire vs. Apple Inc | Goodyear Tire vs. Apple Inc |
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 Exposure Probability module to analyze equity upside and downside potential for a given time horizon across multiple markets.
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