Correlation Between ANTA SPORTS and STMicroelectronics
Can any of the company-specific risk be diversified away by investing in both ANTA SPORTS and STMicroelectronics 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 STMicroelectronics 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 STMicroelectronics NV, you can compare the effects of market volatilities on ANTA SPORTS and STMicroelectronics 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 STMicroelectronics. Check out your portfolio center. Please also check ongoing floating volatility patterns of ANTA SPORTS and STMicroelectronics.
Diversification Opportunities for ANTA SPORTS and STMicroelectronics
0.49 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between ANTA and STMicroelectronics is 0.49. Overlapping area represents the amount of risk that can be diversified away by holding ANTA SPORTS PRODUCT and STMicroelectronics NV in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on STMicroelectronics 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 STMicroelectronics. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of STMicroelectronics has no effect on the direction of ANTA SPORTS i.e., ANTA SPORTS and STMicroelectronics go up and down completely randomly.
Pair Corralation between ANTA SPORTS and STMicroelectronics
Assuming the 90 days trading horizon ANTA SPORTS is expected to generate 3.25 times less return on investment than STMicroelectronics. But when comparing it to its historical volatility, ANTA SPORTS PRODUCT is 1.43 times less risky than STMicroelectronics. It trades about 0.02 of its potential returns per unit of risk. STMicroelectronics NV is currently generating about 0.06 of returns per unit of risk over similar time horizon. If you would invest 2,420 in STMicroelectronics NV on October 25, 2024 and sell it today you would earn a total of 48.00 from holding STMicroelectronics NV or generate 1.98% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
ANTA SPORTS PRODUCT vs. STMicroelectronics NV
Performance |
| Timeline |
| ANTA SPORTS PRODUCT |
| STMicroelectronics |
ANTA SPORTS and STMicroelectronics Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with ANTA SPORTS and STMicroelectronics
The main advantage of trading using opposite ANTA SPORTS and STMicroelectronics positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if ANTA SPORTS position performs unexpectedly, STMicroelectronics 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 STMicroelectronics will offset losses from the drop in STMicroelectronics' long position.| ANTA SPORTS vs. USU Software AG | ANTA SPORTS vs. GBS Software AG | ANTA SPORTS vs. Elmos Semiconductor SE | ANTA SPORTS vs. VITEC SOFTWARE GROUP |
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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 Valuation module to check real value of public entities based on technical and fundamental data.
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