Correlation Between Li Ning and ANTA Sports
Can any of the company-specific risk be diversified away by investing in both Li Ning 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 Li Ning and ANTA Sports into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Li Ning Co and ANTA Sports Products, you can compare the effects of market volatilities on Li Ning 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 Li Ning with a short position of ANTA Sports. Check out your portfolio center. Please also check ongoing floating volatility patterns of Li Ning and ANTA Sports.
Diversification Opportunities for Li Ning and ANTA Sports
0.7 | Correlation Coefficient |
Poor diversification
The 3 months correlation between LNNGY and ANTA is 0.7. Overlapping area represents the amount of risk that can be diversified away by holding Li Ning Co 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 Li Ning 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 Li Ning Co 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 Li Ning i.e., Li Ning and ANTA Sports go up and down completely randomly.
Pair Corralation between Li Ning and ANTA Sports
Assuming the 90 days horizon Li Ning Co is expected to under-perform the ANTA Sports. In addition to that, Li Ning is 1.53 times more volatile than ANTA Sports Products. It trades about -0.04 of its total potential returns per unit of risk. ANTA Sports Products is currently generating about -0.02 per unit of volatility. If you would invest 1,040 in ANTA Sports Products on August 27, 2024 and sell it today you would lose (18.00) from holding ANTA Sports Products or give up 1.73% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Li Ning Co vs. ANTA Sports Products
Performance |
| Timeline |
| Li Ning |
| ANTA Sports Products |
Li Ning and ANTA Sports Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Li Ning and ANTA Sports
The main advantage of trading using opposite Li Ning and ANTA Sports positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Li Ning 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.| Li Ning vs. HUMANA INC | Li Ning vs. Aquagold International | Li Ning vs. Barloworld Ltd ADR | Li Ning vs. Morningstar Unconstrained Allocation |
| ANTA Sports vs. ANTA Sports Products | ANTA Sports vs. Li Ning Company | ANTA Sports vs. Li Ning Co | ANTA Sports vs. Anhui Conch Cement |
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 Portfolio Volatility module to check portfolio volatility and analyze historical return density to properly model market risk.
Other Complementary Tools
| Money Flow Index Determine momentum by analyzing Money Flow Index and other technical indicators | |
| Portfolio Dashboard Portfolio dashboard that provides centralized access to all your investments | |
| Portfolio Rebalancing Analyze risk-adjusted returns against different time horizons to find asset-allocation targets | |
| Earnings Calls Check upcoming earnings announcements updated hourly across public exchanges | |
| Sign In To Macroaxis Sign in to explore Macroaxis' wealth optimization platform and fintech modules |