Correlation Between Assurant and ANTA Sports

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

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

Diversification Opportunities for Assurant and ANTA Sports

-0.7

Correlation Coefficient

Assurant  ANTA Sports

Excellent diversification

The 3 months correlation between Assurant and ANTA is -0.7. Overlapping area represents the amount of risk that can be diversified away by holding Assurant 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 Assurant 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 Assurant 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 Assurant i.e., Assurant and ANTA Sports go up and down completely randomly.

Pair Corralation between Assurant and ANTA Sports

Considering the 90-day investment horizon Assurant is expected to generate 0.43 times more return on investment than ANTA Sports. However, Assurant is 2.3 times less risky than ANTA Sports. It trades about 0.09 of its potential returns per unit of risk. ANTA Sports Products is currently generating about -0.05 per unit of risk. If you would invest  19,815  in Assurant on September 30, 2024 and sell it today you would earn a total of  1,690  from holding Assurant or generate 8.53% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Weak
Accuracy	100.0%
Values	Daily Returns

Assurant  vs.  ANTA Sports Products

Assurant

Risk-Adjusted Performance

7 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Assurant are ranked lower than 7 (%) of all global equities and portfolios over the last 90 days. In spite of fairly unfluctuating forward indicators, Assurant may actually be approaching a critical reversion point that can send shares even higher in January 2025.

ANTA Sports Products

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days ANTA Sports Products has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of latest uncertain performance, the Stock's fundamental indicators remain strong and the current disturbance on Wall Street may also be a sign of long term gains for the company investors.

Pair Trading with Assurant and ANTA Sports

The main advantage of trading using opposite Assurant and ANTA Sports positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Assurant 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 Assurant 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.

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 Portfolio Volatility module to check portfolio volatility and analyze historical return density to properly model market risk.