Correlation Between Brownies Marine and ANTA Sports

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

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

Diversification Opportunities for Brownies Marine and ANTA Sports

-0.04

Correlation Coefficient

Brownies Marine  ANTA Sports

Good diversification

The 3 months correlation between Brownies and ANTA is -0.04. Overlapping area represents the amount of risk that can be diversified away by holding Brownies Marine Group 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 Brownies Marine 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 Brownies Marine Group 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 Brownies Marine i.e., Brownies Marine and ANTA Sports go up and down completely randomly.

Pair Corralation between Brownies Marine and ANTA Sports

Given the investment horizon of 90 days Brownies Marine Group is expected to generate 29.61 times more return on investment than ANTA Sports. However, Brownies Marine is 29.61 times more volatile than ANTA Sports Products. It trades about 0.14 of its potential returns per unit of risk. ANTA Sports Products is currently generating about 0.09 per unit of risk. If you would invest  1.40  in Brownies Marine Group on September 12, 2024 and sell it today you would lose (0.60) from holding Brownies Marine Group or give up 42.86% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Insignificant
Accuracy	96.92%
Values	Daily Returns

Brownies Marine Group  vs.  ANTA Sports Products

Brownies Marine Group

Risk-Adjusted Performance

11 of 100

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Brownies Marine Group are ranked lower than 11 (%) of all global equities and portfolios over the last 90 days. Despite nearly weak primary indicators, Brownies Marine reported solid returns over the last few months and may actually be approaching a breakup point.

ANTA Sports Products

Risk-Adjusted Performance

7 of 100

OK

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

Pair Trading with Brownies Marine and ANTA Sports

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

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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 ETF Categories module to list of ETF categories grouped based on various criteria, such as the investment strategy or type of investments.