Correlation Between Afya and AMREP
Can any of the company-specific risk be diversified away by investing in both Afya and AMREP 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 Afya and AMREP into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Afya and AMREP, you can compare the effects of market volatilities on Afya and AMREP 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 Afya with a short position of AMREP. Check out your portfolio center. Please also check ongoing floating volatility patterns of Afya and AMREP.
Diversification Opportunities for Afya and AMREP
Significant diversification
The 3 months correlation between Afya and AMREP is 0.03. Overlapping area represents the amount of risk that can be diversified away by holding Afya and AMREP in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on AMREP and Afya 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 Afya are associated (or correlated) with AMREP. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of AMREP has no effect on the direction of Afya i.e., Afya and AMREP go up and down completely randomly.
Pair Corralation between Afya and AMREP
Given the investment horizon of 90 days Afya is expected to generate 15.11 times less return on investment than AMREP. But when comparing it to its historical volatility, Afya is 2.22 times less risky than AMREP. It trades about 0.03 of its potential returns per unit of risk. AMREP is currently generating about 0.19 of returns per unit of risk over similar time horizon. If you would invest 3,000 in AMREP on August 27, 2024 and sell it today you would earn a total of 541.00 from holding AMREP or generate 18.03% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Afya vs. AMREP
Performance |
| Timeline |
| Afya |
| AMREP |
Afya and AMREP Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Afya and AMREP
The main advantage of trading using opposite Afya and AMREP positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Afya position performs unexpectedly, AMREP 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 AMREP will offset losses from the drop in AMREP's long position.| Afya vs. American Public Education | Afya vs. Lincoln Educational Services | Afya vs. Adtalem Global Education |
| AMREP vs. Park Electrochemical | AMREP vs. Innovative Solutions and | AMREP vs. Curtiss Wright | AMREP vs. National Presto Industries |
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 Correlation Analysis module to reduce portfolio risk simply by holding instruments which are not perfectly correlated.
Other Complementary Tools
| Stock Tickers Use high-impact, comprehensive, and customizable stock tickers that can be easily integrated to any websites | |
| Fundamentals Comparison Compare fundamentals across multiple equities to find investing opportunities | |
| Investing Opportunities Build portfolios using our predefined set of ideas and optimize them against your investing preferences | |
| Economic Indicators Top statistical indicators that provide insights into how an economy is performing | |
| Financial Widgets Easily integrated Macroaxis content with over 30 different plug-and-play financial widgets |