Correlation Between LGI Homes and ANTA Sports
Can any of the company-specific risk be diversified away by investing in both LGI Homes and ANTA Sports 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 LGI Homes and ANTA Sports into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between LGI Homes and ANTA Sports Products, you can compare the effects of market volatilities on LGI Homes and ANTA Sports 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 LGI Homes with a short position of ANTA Sports. Check out your portfolio center. Please also check ongoing floating volatility patterns of LGI Homes and ANTA Sports.
Diversification Opportunities for LGI Homes and ANTA Sports
-0.54 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between LGI and ANTA is -0.54. Overlapping area represents the amount of risk that can be diversified away by holding LGI Homes and ANTA Sports Products in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on ANTA Sports Products and LGI Homes 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 LGI Homes are associated (or correlated) with ANTA Sports. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of ANTA Sports Products has no effect on the direction of LGI Homes i.e., LGI Homes and ANTA Sports go up and down completely randomly.
Pair Corralation between LGI Homes and ANTA Sports
Assuming the 90 days trading horizon LGI Homes is expected to under-perform the ANTA Sports. In addition to that, LGI Homes is 1.37 times more volatile than ANTA Sports Products. It trades about -0.2 of its total potential returns per unit of risk. ANTA Sports Products is currently generating about 0.08 per unit of volatility. If you would invest 1,002 in ANTA Sports Products on November 28, 2024 and sell it today you would earn a total of 32.00 from holding ANTA Sports Products or generate 3.19% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
LGI Homes vs. ANTA Sports Products
Performance |
| Timeline |
| LGI Homes |
| ANTA Sports Products |
LGI Homes and ANTA Sports Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with LGI Homes and ANTA Sports
The main advantage of trading using opposite LGI Homes and ANTA Sports positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if LGI Homes position performs unexpectedly, ANTA Sports 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 ANTA Sports will offset losses from the drop in ANTA Sports' long position.The idea behind LGI Homes and ANTA Sports Products 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.| ANTA Sports vs. alstria office REIT AG | ANTA Sports vs. Tower One Wireless | ANTA Sports vs. Office Properties Income | ANTA Sports vs. PLAYMATES HLDGS NEW |
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 Positions Ratings module to determine portfolio positions ratings based on digital equity recommendations. Macroaxis instant position ratings are based on combination of fundamental analysis and risk-adjusted market performance.
Other Complementary Tools
| Portfolio Manager State of the art Portfolio Manager to monitor and improve performance of your invested capital | |
| Pair Correlation Compare performance and examine fundamental relationship between any two equity instruments | |
| Stocks Directory Find actively traded stocks across global markets | |
| Bond Analysis Evaluate and analyze corporate bonds as a potential investment for your portfolios. | |
| Sync Your Broker Sync your existing holdings, watchlists, positions or portfolios from thousands of online brokerage services, banks, investment account aggregators and robo-advisors. |