Correlation Between Afya and Northann Corp
Can any of the company-specific risk be diversified away by investing in both Afya and Northann Corp 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 Northann Corp into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Afya and Northann Corp, you can compare the effects of market volatilities on Afya and Northann Corp 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 Northann Corp. Check out your portfolio center. Please also check ongoing floating volatility patterns of Afya and Northann Corp.
Diversification Opportunities for Afya and Northann Corp
-0.38 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Afya and Northann is -0.38. Overlapping area represents the amount of risk that can be diversified away by holding Afya and Northann Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Northann Corp 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 Northann Corp. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Northann Corp has no effect on the direction of Afya i.e., Afya and Northann Corp go up and down completely randomly.
Pair Corralation between Afya and Northann Corp
Given the investment horizon of 90 days Afya is expected to generate 0.3 times more return on investment than Northann Corp. However, Afya is 3.35 times less risky than Northann Corp. It trades about -0.03 of its potential returns per unit of risk. Northann Corp is currently generating about -0.02 per unit of risk. If you would invest 2,039 in Afya on November 4, 2024 and sell it today you would lose (424.00) from holding Afya or give up 20.79% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Afya vs. Northann Corp
Performance |
| Timeline |
| Afya |
| Northann Corp |
Afya and Northann Corp Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Afya and Northann Corp
The main advantage of trading using opposite Afya and Northann Corp positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Afya position performs unexpectedly, Northann Corp 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 Northann Corp will offset losses from the drop in Northann Corp's long position.| Afya vs. Adtalem Global Education | Afya vs. Laureate Education | Afya vs. American Public Education | Afya vs. Strategic Education |
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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 Equity Analysis module to research over 250,000 global equities including funds, stocks and ETFs to find investment opportunities.
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