Correlation Between ANTA Sports and Expedia

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

Diversification Opportunities for ANTA Sports and Expedia

-0.46

Correlation Coefficient

ANTA Sports  Expedia

Very good diversification

The 3 months correlation between ANTA and Expedia is -0.46. Overlapping area represents the amount of risk that can be diversified away by holding ANTA Sports Products and Expedia Group in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Expedia 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 Expedia. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Expedia Group has no effect on the direction of ANTA Sports i.e., ANTA Sports and Expedia go up and down completely randomly.

Pair Corralation between ANTA Sports and Expedia

Assuming the 90 days horizon ANTA Sports Products is expected to under-perform the Expedia. In addition to that, ANTA Sports is 1.46 times more volatile than Expedia Group. It trades about 0.0 of its total potential returns per unit of risk. Expedia Group is currently generating about 0.23 per unit of volatility. If you would invest  13,008  in Expedia Group on September 26, 2024 and sell it today you would earn a total of  4,644  from holding Expedia Group or generate 35.7% return on investment over 90 days.

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

ANTA Sports Products  vs.  Expedia Group

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. Despite nearly stable basic indicators, ANTA Sports is not utilizing all of its potentials. The current stock price disturbance, may contribute to mid-run losses for the stockholders.

Expedia Group

Risk-Adjusted Performance

17 of 100

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Expedia Group are ranked lower than 17 (%) of all global equities and portfolios over the last 90 days. Despite nearly fragile basic indicators, Expedia reported solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with ANTA Sports and Expedia

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

The idea behind ANTA Sports Products and Expedia 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 File Import module to quickly import all of your third-party portfolios from your local drive in csv format.