Correlation Between Afya and Natures Miracle
Can any of the company-specific risk be diversified away by investing in both Afya and Natures Miracle 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 Natures Miracle into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Afya and Natures Miracle Holding, you can compare the effects of market volatilities on Afya and Natures Miracle 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 Natures Miracle. Check out your portfolio center. Please also check ongoing floating volatility patterns of Afya and Natures Miracle.
Diversification Opportunities for Afya and Natures Miracle
-0.33 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Afya and Natures is -0.33. Overlapping area represents the amount of risk that can be diversified away by holding Afya and Natures Miracle Holding in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Natures Miracle Holding 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 Natures Miracle. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Natures Miracle Holding has no effect on the direction of Afya i.e., Afya and Natures Miracle go up and down completely randomly.
Pair Corralation between Afya and Natures Miracle
Given the investment horizon of 90 days Afya is expected to generate 0.24 times more return on investment than Natures Miracle. However, Afya is 4.12 times less risky than Natures Miracle. It trades about 0.04 of its potential returns per unit of risk. Natures Miracle Holding is currently generating about -0.1 per unit of risk. If you would invest 1,303 in Afya on September 2, 2024 and sell it today you would earn a total of 320.00 from holding Afya or generate 24.56% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Afya vs. Natures Miracle Holding
Performance |
| Timeline |
| Afya |
| Natures Miracle Holding |
Afya and Natures Miracle Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Afya and Natures Miracle
The main advantage of trading using opposite Afya and Natures Miracle positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Afya position performs unexpectedly, Natures Miracle 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 Natures Miracle will offset losses from the drop in Natures Miracle's long position.| Afya vs. American Public Education | Afya vs. ATA Creativity Global | Afya vs. Cogna Educacao SA | Afya vs. Adtalem Global Education |
| Natures Miracle vs. GEN Restaurant Group, | Natures Miracle vs. Centessa Pharmaceuticals PLC | Natures Miracle vs. Dave Busters Entertainment | Natures Miracle vs. Catalyst 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 Portfolio Anywhere module to track or share privately all of your investments from the convenience of any device.
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