Correlation Between Afya and Four Seasons
Can any of the company-specific risk be diversified away by investing in both Afya and Four Seasons 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 Four Seasons into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Afya and Four Seasons Education, you can compare the effects of market volatilities on Afya and Four Seasons 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 Four Seasons. Check out your portfolio center. Please also check ongoing floating volatility patterns of Afya and Four Seasons.
Diversification Opportunities for Afya and Four Seasons
0.4 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Afya and Four is 0.4. Overlapping area represents the amount of risk that can be diversified away by holding Afya and Four Seasons Education in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Four Seasons Education 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 Four Seasons. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Four Seasons Education has no effect on the direction of Afya i.e., Afya and Four Seasons go up and down completely randomly.
Pair Corralation between Afya and Four Seasons
Given the investment horizon of 90 days Afya is expected to generate 43.62 times less return on investment than Four Seasons. But when comparing it to its historical volatility, Afya is 20.49 times less risky than Four Seasons. It trades about 0.02 of its potential returns per unit of risk. Four Seasons Education is currently generating about 0.05 of returns per unit of risk over similar time horizon. If you would invest 800.00 in Four Seasons Education on August 24, 2024 and sell it today you would earn a total of 280.00 from holding Four Seasons Education or generate 35.0% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 83.06% |
| Values | Daily Returns |
Afya vs. Four Seasons Education
Performance |
| Timeline |
| Afya |
| Four Seasons Education |
Afya and Four Seasons Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Afya and Four Seasons
The main advantage of trading using opposite Afya and Four Seasons positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Afya position performs unexpectedly, Four Seasons 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 Four Seasons will offset losses from the drop in Four Seasons' long position.| Afya vs. Adtalem Global Education | Afya vs. Laureate Education | Afya vs. American Public Education | Afya vs. Strategic Education |
| Four Seasons vs. TAL Education Group | Four Seasons vs. Strategic Education | Four Seasons vs. Vasta Platform | Four Seasons vs. Afya |
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 Analyzer module to analyze all characteristics, volatility and risk-adjusted return of Macroaxis ideas.
Other Complementary Tools
| Stock Tickers Use high-impact, comprehensive, and customizable stock tickers that can be easily integrated to any websites | |
| Correlation Analysis Reduce portfolio risk simply by holding instruments which are not perfectly correlated | |
| Headlines Timeline Stay connected to all market stories and filter out noise. Drill down to analyze hype elasticity | |
| Price Ceiling Movement Calculate and plot Price Ceiling Movement for different equity instruments | |
| Equity Valuation Check real value of public entities based on technical and fundamental data |