Correlation Between United Parks and ANTA Sports

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Can any of the company-specific risk be diversified away by investing in both United Parks 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 United Parks and ANTA Sports into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between United Parks Resorts and ANTA Sports Products, you can compare the effects of market volatilities on United Parks 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 United Parks with a short position of ANTA Sports. Check out your portfolio center. Please also check ongoing floating volatility patterns of United Parks and ANTA Sports.

Diversification Opportunities for United Parks and ANTA Sports

-0.1
  Correlation Coefficient

Good diversification

The 3 months correlation between United and ANTA is -0.1. Overlapping area represents the amount of risk that can be diversified away by holding United Parks Resorts 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 United Parks 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 United Parks Resorts 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 United Parks i.e., United Parks and ANTA Sports go up and down completely randomly.

Pair Corralation between United Parks and ANTA Sports

Given the investment horizon of 90 days United Parks Resorts is expected to generate 0.77 times more return on investment than ANTA Sports. However, United Parks Resorts is 1.29 times less risky than ANTA Sports. It trades about 0.03 of its potential returns per unit of risk. ANTA Sports Products is currently generating about 0.02 per unit of risk. If you would invest  5,054  in United Parks Resorts on August 29, 2024 and sell it today you would earn a total of  669.00  from holding United Parks Resorts or generate 13.24% return on investment over 90 days.
Time Period3 Months [change]
DirectionMoves Against 
StrengthInsignificant
Accuracy100.0%
ValuesDaily Returns

United Parks Resorts  vs.  ANTA Sports Products

 Performance 
       Timeline  
United Parks Resorts 

Risk-Adjusted Performance

9 of 100

 
Weak
 
Strong
OK
Compared to the overall equity markets, risk-adjusted returns on investments in United Parks Resorts are ranked lower than 9 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively inconsistent forward-looking signals, United Parks unveiled solid returns over the last few months and may actually be approaching a breakup point.
ANTA Sports Products 

Risk-Adjusted Performance

1 of 100

 
Weak
 
Strong
Weak
Compared to the overall equity markets, risk-adjusted returns on investments in ANTA Sports Products are ranked lower than 1 (%) of all global equities and portfolios over the last 90 days. In spite of fairly strong fundamental indicators, ANTA Sports is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

United Parks and ANTA Sports Volatility Contrast

   Predicted Return Density   
       Returns  

Pair Trading with United Parks and ANTA Sports

The main advantage of trading using opposite United Parks and ANTA Sports positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if United Parks 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 United Parks Resorts 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.
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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 Price Ceiling Movement module to calculate and plot Price Ceiling Movement for different equity instruments.

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