Correlation Between ANTA SPORTS and POWER METALS
Can any of the company-specific risk be diversified away by investing in both ANTA SPORTS and POWER METALS 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 POWER METALS 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 POWER METALS, you can compare the effects of market volatilities on ANTA SPORTS and POWER METALS 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 POWER METALS. Check out your portfolio center. Please also check ongoing floating volatility patterns of ANTA SPORTS and POWER METALS.
Diversification Opportunities for ANTA SPORTS and POWER METALS
0.65 | Correlation Coefficient |
Poor diversification
The 3 months correlation between ANTA and POWER is 0.65. Overlapping area represents the amount of risk that can be diversified away by holding ANTA SPORTS PRODUCT and POWER METALS in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on POWER METALS 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 POWER METALS. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of POWER METALS has no effect on the direction of ANTA SPORTS i.e., ANTA SPORTS and POWER METALS go up and down completely randomly.
Pair Corralation between ANTA SPORTS and POWER METALS
Assuming the 90 days trading horizon ANTA SPORTS is expected to generate 2.15 times less return on investment than POWER METALS. But when comparing it to its historical volatility, ANTA SPORTS PRODUCT is 1.82 times less risky than POWER METALS. It trades about 0.03 of its potential returns per unit of risk. POWER METALS is currently generating about 0.04 of returns per unit of risk over similar time horizon. If you would invest 22.00 in POWER METALS on September 14, 2024 and sell it today you would earn a total of 7.00 from holding POWER METALS or generate 31.82% 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. POWER METALS
Performance |
| Timeline |
| ANTA SPORTS PRODUCT |
| POWER METALS |
ANTA SPORTS and POWER METALS Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with ANTA SPORTS and POWER METALS
The main advantage of trading using opposite ANTA SPORTS and POWER METALS positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if ANTA SPORTS position performs unexpectedly, POWER METALS 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 POWER METALS will offset losses from the drop in POWER METALS's long position.| ANTA SPORTS vs. Apple Inc | ANTA SPORTS vs. Apple Inc | ANTA SPORTS vs. Apple Inc | ANTA SPORTS vs. Apple Inc |
| POWER METALS vs. COLUMBIA SPORTSWEAR | POWER METALS vs. Dairy Farm International | POWER METALS vs. ANTA SPORTS PRODUCT | POWER METALS vs. TITANIUM TRANSPORTGROUP |
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 Sectors module to list of equity sectors categorizing publicly traded companies based on their primary business activities.
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