Correlation Between ATA Creativity and Afya
Can any of the company-specific risk be diversified away by investing in both ATA Creativity and Afya 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 ATA Creativity and Afya into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between ATA Creativity Global and Afya, you can compare the effects of market volatilities on ATA Creativity and Afya 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 ATA Creativity with a short position of Afya. Check out your portfolio center. Please also check ongoing floating volatility patterns of ATA Creativity and Afya.
Diversification Opportunities for ATA Creativity and Afya
0.31 | Correlation Coefficient |
Weak diversification
The 3 months correlation between ATA and Afya is 0.31. Overlapping area represents the amount of risk that can be diversified away by holding ATA Creativity Global and Afya in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Afya and ATA Creativity 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 ATA Creativity Global are associated (or correlated) with Afya. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Afya has no effect on the direction of ATA Creativity i.e., ATA Creativity and Afya go up and down completely randomly.
Pair Corralation between ATA Creativity and Afya
Given the investment horizon of 90 days ATA Creativity is expected to generate 1.33 times less return on investment than Afya. In addition to that, ATA Creativity is 1.97 times more volatile than Afya. It trades about 0.01 of its total potential returns per unit of risk. Afya is currently generating about 0.02 per unit of volatility. If you would invest 1,466 in Afya on September 3, 2024 and sell it today you would earn a total of 193.00 from holding Afya or generate 13.17% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
ATA Creativity Global vs. Afya
Performance |
| Timeline |
| ATA Creativity Global |
| Afya |
ATA Creativity and Afya Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with ATA Creativity and Afya
The main advantage of trading using opposite ATA Creativity and Afya positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if ATA Creativity position performs unexpectedly, Afya 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 Afya will offset losses from the drop in Afya's long position.| ATA Creativity vs. Universal Technical Institute | ATA Creativity vs. Cogna Educacao SA | ATA Creativity vs. Sunlands Technology Group | ATA Creativity vs. American Public Education |
| Afya vs. Adtalem Global Education | Afya vs. Laureate Education | Afya vs. American Public Education | Afya vs. Strategic Education |
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 Portfolio Comparator module to compare the composition, asset allocations and performance of any two portfolios in your account.
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