Correlation Between Afya and Bluerock Homes
Can any of the company-specific risk be diversified away by investing in both Afya and Bluerock Homes 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 Bluerock Homes into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Afya and Bluerock Homes Trust, you can compare the effects of market volatilities on Afya and Bluerock Homes 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 Bluerock Homes. Check out your portfolio center. Please also check ongoing floating volatility patterns of Afya and Bluerock Homes.
Diversification Opportunities for Afya and Bluerock Homes
-0.12 | Correlation Coefficient |
Good diversification
The 3 months correlation between Afya and Bluerock is -0.12. Overlapping area represents the amount of risk that can be diversified away by holding Afya and Bluerock Homes Trust in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Bluerock Homes Trust 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 Bluerock Homes. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Bluerock Homes Trust has no effect on the direction of Afya i.e., Afya and Bluerock Homes go up and down completely randomly.
Pair Corralation between Afya and Bluerock Homes
Given the investment horizon of 90 days Afya is expected to generate 0.9 times more return on investment than Bluerock Homes. However, Afya is 1.11 times less risky than Bluerock Homes. It trades about 0.04 of its potential returns per unit of risk. Bluerock Homes Trust is currently generating about 0.01 per unit of risk. If you would invest 1,303 in Afya on September 4, 2024 and sell it today you would earn a total of 356.00 from holding Afya or generate 27.32% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Afya vs. Bluerock Homes Trust
Performance |
| Timeline |
| Afya |
| Bluerock Homes Trust |
Afya and Bluerock Homes Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Afya and Bluerock Homes
The main advantage of trading using opposite Afya and Bluerock Homes positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Afya position performs unexpectedly, Bluerock Homes 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 Bluerock Homes will offset losses from the drop in Bluerock Homes' long position.| Afya vs. Laureate Education | Afya vs. Lincoln Educational Services | Afya vs. Adtalem Global Education | Afya vs. Strategic Education |
| Bluerock Homes vs. Nexpoint Residential Trust | Bluerock Homes vs. Clipper Realty | Bluerock Homes vs. Centerspace | Bluerock Homes vs. Equity Lifestyle Properties |
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 Idea Optimizer module to use advanced portfolio builder with pre-computed micro ideas to build optimal portfolio .
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