Correlation Between Ming Le and ANTA SPORTS
Can any of the company-specific risk be diversified away by investing in both Ming Le 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 Ming Le and ANTA SPORTS into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Ming Le Sports and ANTA SPORTS PRODUCT, you can compare the effects of market volatilities on Ming Le 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 Ming Le with a short position of ANTA SPORTS. Check out your portfolio center. Please also check ongoing floating volatility patterns of Ming Le and ANTA SPORTS.
Diversification Opportunities for Ming Le and ANTA SPORTS
-0.2 | Correlation Coefficient |
Good diversification
The 3 months correlation between Ming and ANTA is -0.2. Overlapping area represents the amount of risk that can be diversified away by holding Ming Le Sports and ANTA SPORTS PRODUCT in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on ANTA SPORTS PRODUCT and Ming Le 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 Ming Le Sports 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 PRODUCT has no effect on the direction of Ming Le i.e., Ming Le and ANTA SPORTS go up and down completely randomly.
Pair Corralation between Ming Le and ANTA SPORTS
Assuming the 90 days trading horizon Ming Le is expected to generate 1.25 times less return on investment than ANTA SPORTS. But when comparing it to its historical volatility, Ming Le Sports is 1.22 times less risky than ANTA SPORTS. It trades about 0.03 of its potential returns per unit of risk. ANTA SPORTS PRODUCT is currently generating about 0.03 of returns per unit of risk over similar time horizon. If you would invest 838.00 in ANTA SPORTS PRODUCT on August 25, 2024 and sell it today you would earn a total of 114.00 from holding ANTA SPORTS PRODUCT or generate 13.6% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 99.64% |
| Values | Daily Returns |
Ming Le Sports vs. ANTA SPORTS PRODUCT
Performance |
| Timeline |
| Ming Le Sports |
| ANTA SPORTS PRODUCT |
Ming Le and ANTA SPORTS Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Ming Le and ANTA SPORTS
The main advantage of trading using opposite Ming Le and ANTA SPORTS positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Ming Le 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's long position.The idea behind Ming Le Sports and ANTA SPORTS PRODUCT 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. Apple Inc | ANTA SPORTS vs. Apple Inc | ANTA SPORTS vs. Apple Inc | ANTA SPORTS 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 Commodity Channel module to use Commodity Channel Index to analyze current equity momentum.
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