Correlation Between Advtech and Afine Investments
Can any of the company-specific risk be diversified away by investing in both Advtech and Afine Investments 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 Advtech and Afine Investments into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Advtech and Afine Investments, you can compare the effects of market volatilities on Advtech and Afine Investments 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 Advtech with a short position of Afine Investments. Check out your portfolio center. Please also check ongoing floating volatility patterns of Advtech and Afine Investments.
Diversification Opportunities for Advtech and Afine Investments
-0.3 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Advtech and Afine is -0.3. Overlapping area represents the amount of risk that can be diversified away by holding Advtech and Afine Investments in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Afine Investments and Advtech 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 Advtech are associated (or correlated) with Afine Investments. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Afine Investments has no effect on the direction of Advtech i.e., Advtech and Afine Investments go up and down completely randomly.
Pair Corralation between Advtech and Afine Investments
Assuming the 90 days trading horizon Advtech is expected to generate 40.8 times less return on investment than Afine Investments. But when comparing it to its historical volatility, Advtech is 52.06 times less risky than Afine Investments. It trades about 0.09 of its potential returns per unit of risk. Afine Investments is currently generating about 0.07 of returns per unit of risk over similar time horizon. If you would invest 37,563 in Afine Investments on August 30, 2024 and sell it today you would earn a total of 7,437 from holding Afine Investments or generate 19.8% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Advtech vs. Afine Investments
Performance |
| Timeline |
| Advtech |
| Afine Investments |
Advtech and Afine Investments Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Advtech and Afine Investments
The main advantage of trading using opposite Advtech and Afine Investments positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Advtech position performs unexpectedly, Afine Investments 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 Afine Investments will offset losses from the drop in Afine Investments' long position.| Advtech vs. Reinet Investments SCA | Advtech vs. Safari Investments RSA | Advtech vs. Brimstone Investment | Advtech vs. HomeChoice Investments |
| Afine Investments vs. CA Sales Holdings | Afine Investments vs. ABSA Bank Limited | Afine Investments vs. HomeChoice Investments | Afine Investments vs. RCL Foods |
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 Stock Tickers module to use high-impact, comprehensive, and customizable stock tickers that can be easily integrated to any websites.
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