Correlation Between ANTA Sports and Technogym SpA

Can any of the company-specific risk be diversified away by investing in both ANTA Sports and Technogym SpA 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 Technogym SpA into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between ANTA Sports Products and Technogym SpA, you can compare the effects of market volatilities on ANTA Sports and Technogym SpA 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 Technogym SpA. Check out your portfolio center. Please also check ongoing floating volatility patterns of ANTA Sports and Technogym SpA.

Diversification Opportunities for ANTA Sports and Technogym SpA

0.69

Correlation Coefficient

ANTA Sports  Technogym SpA

Poor diversification

The 3 months correlation between ANTA and Technogym is 0.69. Overlapping area represents the amount of risk that can be diversified away by holding ANTA Sports Products and Technogym SpA in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Technogym SpA 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 Products are associated (or correlated) with Technogym SpA. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Technogym SpA has no effect on the direction of ANTA Sports i.e., ANTA Sports and Technogym SpA go up and down completely randomly.

Pair Corralation between ANTA Sports and Technogym SpA

Assuming the 90 days horizon ANTA Sports Products is expected to generate 3.86 times more return on investment than Technogym SpA. However, ANTA Sports is 3.86 times more volatile than Technogym SpA. It trades about 0.03 of its potential returns per unit of risk. Technogym SpA is currently generating about -0.21 per unit of risk. If you would invest  1,101  in ANTA Sports Products on February 3, 2024 and sell it today you would earn a total of  9.00  from holding ANTA Sports Products or generate 0.82% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Significant
Accuracy	95.65%
Values	Daily Returns

ANTA Sports Products  vs.  Technogym SpA

ANTA Sports Products

Risk-Adjusted Performance

14 of 100

Good

Compared to the overall equity markets, risk-adjusted returns on investments in ANTA Sports Products are ranked lower than 14 (%) of all global equities and portfolios over the last 90 days. Despite nearly uncertain fundamental indicators, ANTA Sports reported solid returns over the last few months and may actually be approaching a breakup point.

Technogym SpA

Risk-Adjusted Performance

7 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Technogym SpA are ranked lower than 7 (%) of all global equities and portfolios over the last 90 days. Despite nearly uncertain technical indicators, Technogym SpA may actually be approaching a critical reversion point that can send shares even higher in June 2024.

Pair Trading with ANTA Sports and Technogym SpA

The main advantage of trading using opposite ANTA Sports and Technogym SpA positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if ANTA Sports position performs unexpectedly, Technogym SpA 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 Technogym SpA will offset losses from the drop in Technogym SpA's long position.

The idea behind ANTA Sports Products and Technogym SpA 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 Latest Portfolios module to quick portfolio dashboard that showcases your latest portfolios.