Correlation Between ANTA Sports and Bowlero Corp

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

Diversification Opportunities for ANTA Sports and Bowlero Corp

-0.01

Correlation Coefficient

ANTA Sports  Bowlero Corp

Good diversification

The 3 months correlation between ANTA and Bowlero is -0.01. Overlapping area represents the amount of risk that can be diversified away by holding ANTA Sports Products and Bowlero Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Bowlero Corp 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 Bowlero Corp. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Bowlero Corp has no effect on the direction of ANTA Sports i.e., ANTA Sports and Bowlero Corp go up and down completely randomly.

Pair Corralation between ANTA Sports and Bowlero Corp

Assuming the 90 days horizon ANTA Sports Products is expected to generate 1.46 times more return on investment than Bowlero Corp. However, ANTA Sports is 1.46 times more volatile than Bowlero Corp. It trades about 0.09 of its potential returns per unit of risk. Bowlero Corp is currently generating about 0.03 per unit of risk. If you would invest  22,128  in ANTA Sports Products on September 12, 2024 and sell it today you would earn a total of  4,580  from holding ANTA Sports Products or generate 20.7% return on investment over 90 days.

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

ANTA Sports Products  vs.  Bowlero Corp

ANTA Sports Products

Risk-Adjusted Performance

7 of 100

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in ANTA Sports Products are ranked lower than 7 (%) of all global equities and portfolios over the last 90 days. In spite of fairly weak fundamental indicators, ANTA Sports showed solid returns over the last few months and may actually be approaching a breakup point.

Bowlero Corp

Risk-Adjusted Performance

2 of 100

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in Bowlero Corp are ranked lower than 2 (%) of all global equities and portfolios over the last 90 days. Despite quite persistent basic indicators, Bowlero Corp is not utilizing all of its potentials. The current stock price mess, may contribute to short-term losses for the institutional investors.

Pair Trading with ANTA Sports and Bowlero Corp

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

The idea behind ANTA Sports Products and Bowlero Corp 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 Technical Analysis module to check basic technical indicators and analysis based on most latest market data.