Correlation Between Anterix and ESSEX

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

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

Diversification Opportunities for Anterix and ESSEX

0.33

Correlation Coefficient

Anterix  ESSEX

Weak diversification

The 3 months correlation between Anterix and ESSEX is 0.33. Overlapping area represents the amount of risk that can be diversified away by holding Anterix and ESSEX PORTFOLIO L in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on ESSEX PORTFOLIO L and Anterix 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 Anterix are associated (or correlated) with ESSEX. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of ESSEX PORTFOLIO L has no effect on the direction of Anterix i.e., Anterix and ESSEX go up and down completely randomly.

Pair Corralation between Anterix and ESSEX

Given the investment horizon of 90 days Anterix is expected to under-perform the ESSEX. In addition to that, Anterix is 12.72 times more volatile than ESSEX PORTFOLIO L. It trades about -0.12 of its total potential returns per unit of risk. ESSEX PORTFOLIO L is currently generating about -0.13 per unit of volatility. If you would invest  9,933  in ESSEX PORTFOLIO L on September 26, 2024 and sell it today you would lose (134.00) from holding ESSEX PORTFOLIO L or give up 1.35% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Very Weak
Accuracy	87.3%
Values	Daily Returns

Anterix  vs.  ESSEX PORTFOLIO L

Anterix

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Anterix has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of inconsistent performance in the last few months, the Stock's technical and fundamental indicators remain fairly strong which may send shares a bit higher in January 2025. The current disturbance may also be a sign of long term up-swing for the company investors.

ESSEX PORTFOLIO L

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days ESSEX PORTFOLIO L has generated negative risk-adjusted returns adding no value to investors with long positions. Despite somewhat strong basic indicators, ESSEX is not utilizing all of its potentials. The latest stock price disturbance, may contribute to short-term losses for the investors.

Pair Trading with Anterix and ESSEX

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

The idea behind Anterix and ESSEX PORTFOLIO L 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 Headlines Timeline module to stay connected to all market stories and filter out noise. Drill down to analyze hype elasticity.