Correlation Between Afya and Genfit
Can any of the company-specific risk be diversified away by investing in both Afya and Genfit 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 Genfit into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Afya and Genfit, you can compare the effects of market volatilities on Afya and Genfit 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 Genfit. Check out your portfolio center. Please also check ongoing floating volatility patterns of Afya and Genfit.
Diversification Opportunities for Afya and Genfit
Poor diversification
The 3 months correlation between Afya and Genfit is 0.79. Overlapping area represents the amount of risk that can be diversified away by holding Afya and Genfit in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Genfit 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 Genfit. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Genfit has no effect on the direction of Afya i.e., Afya and Genfit go up and down completely randomly.
Pair Corralation between Afya and Genfit
Given the investment horizon of 90 days Afya is expected to generate 0.59 times more return on investment than Genfit. However, Afya is 1.68 times less risky than Genfit. It trades about 0.09 of its potential returns per unit of risk. Genfit is currently generating about -0.03 per unit of risk. If you would invest 1,563 in Afya on November 3, 2024 and sell it today you would earn a total of 51.00 from holding Afya or generate 3.26% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Afya vs. Genfit
Performance |
| Timeline |
| Afya |
| Genfit |
Afya and Genfit Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Afya and Genfit
The main advantage of trading using opposite Afya and Genfit positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Afya position performs unexpectedly, Genfit 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 Genfit will offset losses from the drop in Genfit's long position.| Afya vs. Adtalem Global Education | Afya vs. Laureate Education | Afya vs. American Public Education | Afya vs. Strategic Education |
| Genfit vs. HCW Biologics | Genfit vs. Molecular Partners AG | Genfit vs. MediciNova | Genfit vs. Anebulo Pharmaceuticals |
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 Risk-Return Analysis module to view associations between returns expected from investment and the risk you assume.
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