Correlation Between DALATA HOTEL and ANTA SPORTS

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

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

Diversification Opportunities for DALATA HOTEL and ANTA SPORTS

-0.46

Correlation Coefficient

DALATA HOTEL  ANTA SPORTS

Very good diversification

The 3 months correlation between DALATA and ANTA is -0.46. Overlapping area represents the amount of risk that can be diversified away by holding DALATA HOTEL and ANTA SPORTS PRODUCT in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on ANTA SPORTS PRODUCT and DALATA HOTEL 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 DALATA HOTEL 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 PRODUCT has no effect on the direction of DALATA HOTEL i.e., DALATA HOTEL and ANTA SPORTS go up and down completely randomly.

Pair Corralation between DALATA HOTEL and ANTA SPORTS

Assuming the 90 days trading horizon DALATA HOTEL is expected to generate 1.35 times less return on investment than ANTA SPORTS. But when comparing it to its historical volatility, DALATA HOTEL is 2.2 times less risky than ANTA SPORTS. It trades about 0.25 of its potential returns per unit of risk. ANTA SPORTS PRODUCT is currently generating about 0.15 of returns per unit of risk over similar time horizon. If you would invest  910.00  in ANTA SPORTS PRODUCT on September 29, 2024 and sell it today you would earn a total of  75.00  from holding ANTA SPORTS PRODUCT or generate 8.24% return on investment over 90 days.

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

DALATA HOTEL  vs.  ANTA SPORTS PRODUCT

DALATA HOTEL

Risk-Adjusted Performance

5 of 100

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in DALATA HOTEL are ranked lower than 5 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively unsteady basic indicators, DALATA HOTEL unveiled solid returns over the last few months and may actually be approaching a breakup point.

ANTA SPORTS PRODUCT

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days ANTA SPORTS PRODUCT has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of latest uncertain performance, the Stock's basic indicators remain sound and the latest tumult on Wall Street may also be a sign of longer-term gains for the firm shareholders.

Pair Trading with DALATA HOTEL and ANTA SPORTS

The main advantage of trading using opposite DALATA HOTEL and ANTA SPORTS positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if DALATA HOTEL 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's long position.

The idea behind DALATA HOTEL and ANTA SPORTS PRODUCT 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 Sync Your Broker module to sync your existing holdings, watchlists, positions or portfolios from thousands of online brokerage services, banks, investment account aggregators and robo-advisors..