Correlation Between Afya and MF International
Can any of the company-specific risk be diversified away by investing in both Afya and MF International 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 MF International into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Afya and mF International Limited, you can compare the effects of market volatilities on Afya and MF International 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 MF International. Check out your portfolio center. Please also check ongoing floating volatility patterns of Afya and MF International.
Diversification Opportunities for Afya and MF International
0.36 | Correlation Coefficient |
Weak diversification
The 3 months correlation between Afya and MFI is 0.36. Overlapping area represents the amount of risk that can be diversified away by holding Afya and mF International Limited in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on mF International 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 MF International. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of mF International has no effect on the direction of Afya i.e., Afya and MF International go up and down completely randomly.
Pair Corralation between Afya and MF International
Given the investment horizon of 90 days Afya is expected to generate 0.68 times more return on investment than MF International. However, Afya is 1.47 times less risky than MF International. It trades about -0.18 of its potential returns per unit of risk. mF International Limited is currently generating about -0.28 per unit of risk. If you would invest 1,763 in Afya on September 3, 2024 and sell it today you would lose (140.00) from holding Afya or give up 7.94% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Afya vs. mF International Limited
Performance |
| Timeline |
| Afya |
| mF International |
Afya and MF International Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Afya and MF International
The main advantage of trading using opposite Afya and MF International positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Afya position performs unexpectedly, MF International 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 MF International will offset losses from the drop in MF International's long position.| Afya vs. Adtalem Global Education | Afya vs. Laureate Education | Afya vs. American Public Education | Afya vs. Strategic Education |
| MF International vs. Unity Software | MF International vs. Daily Journal Corp | MF International vs. C3 Ai Inc | MF International vs. A2Z Smart Technologies |
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 ETF Categories module to list of ETF categories grouped based on various criteria, such as the investment strategy or type of investments.
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