Correlation Between ANTA Sports and Shimano

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

Diversification Opportunities for ANTA Sports and Shimano

0.82

Correlation Coefficient

ANTA Sports  Shimano

Very poor diversification

The 3 months correlation between ANTA and Shimano is 0.82. Overlapping area represents the amount of risk that can be diversified away by holding ANTA Sports Products and Shimano Inc ADR in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Shimano Inc ADR 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 Shimano. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Shimano Inc ADR has no effect on the direction of ANTA Sports i.e., ANTA Sports and Shimano go up and down completely randomly.

Pair Corralation between ANTA Sports and Shimano

Assuming the 90 days horizon ANTA Sports Products is expected to under-perform the Shimano. In addition to that, ANTA Sports is 1.87 times more volatile than Shimano Inc ADR. It trades about -0.01 of its total potential returns per unit of risk. Shimano Inc ADR is currently generating about 0.04 per unit of volatility. If you would invest  1,601  in Shimano Inc ADR on February 26, 2024 and sell it today you would earn a total of  16.00  from holding Shimano Inc ADR or generate 1.0% return on investment over 90 days.

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

ANTA Sports Products  vs.  Shimano Inc ADR

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. Despite nearly fragile fundamental indicators, ANTA Sports reported solid returns over the last few months and may actually be approaching a breakup point.

Shimano Inc ADR

Risk-Adjusted Performance

12 of 100

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Shimano Inc ADR are ranked lower than 12 (%) of all global equities and portfolios over the last 90 days. In spite of fairly fragile basic indicators, Shimano showed solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with ANTA Sports and Shimano

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

The idea behind ANTA Sports Products and Shimano Inc ADR 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 Economic Indicators module to top statistical indicators that provide insights into how an economy is performing.