Correlation Between ANTA Sports and Sligro Food

Can any of the company-specific risk be diversified away by investing in both ANTA Sports and Sligro Food 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 Sligro Food 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 Sligro Food Group, you can compare the effects of market volatilities on ANTA Sports and Sligro Food 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 Sligro Food. Check out your portfolio center. Please also check ongoing floating volatility patterns of ANTA Sports and Sligro Food.

Diversification Opportunities for ANTA Sports and Sligro Food

0.47

Correlation Coefficient

ANTA Sports  Sligro Food

Very weak diversification

The 3 months correlation between ANTA and Sligro is 0.47. Overlapping area represents the amount of risk that can be diversified away by holding ANTA Sports Products and Sligro Food Group in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Sligro Food Group 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 Sligro Food. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Sligro Food Group has no effect on the direction of ANTA Sports i.e., ANTA Sports and Sligro Food go up and down completely randomly.

Pair Corralation between ANTA Sports and Sligro Food

Assuming the 90 days horizon ANTA Sports Products is expected to generate 1.19 times more return on investment than Sligro Food. However, ANTA Sports is 1.19 times more volatile than Sligro Food Group. It trades about 0.03 of its potential returns per unit of risk. Sligro Food Group is currently generating about -0.21 per unit of risk. If you would invest  25,846  in ANTA Sports Products on September 16, 2024 and sell it today you would earn a total of  297.00  from holding ANTA Sports Products or generate 1.15% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Weak
Accuracy	95.45%
Values	Daily Returns

ANTA Sports Products  vs.  Sligro Food Group

ANTA Sports Products

Risk-Adjusted Performance

6 of 100

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in ANTA Sports Products are ranked lower than 6 (%) of all global equities and portfolios over the last 90 days. In spite of fairly fragile fundamental indicators, ANTA Sports showed solid returns over the last few months and may actually be approaching a breakup point.

Sligro Food Group

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Sligro Food Group has generated negative risk-adjusted returns adding no value to investors with long positions. Despite latest fragile performance, the Stock's basic indicators remain stable and the current disturbance on Wall Street may also be a sign of long-run gains for the company stockholders.

Pair Trading with ANTA Sports and Sligro Food

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

The idea behind ANTA Sports Products and Sligro Food Group 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 Portfolio Optimization module to compute new portfolio that will generate highest expected return given your specified tolerance for risk.