Correlation Between Afya and Under Armour
Can any of the company-specific risk be diversified away by investing in both Afya and Under Armour 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 Under Armour into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Afya and Under Armour C, you can compare the effects of market volatilities on Afya and Under Armour 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 Under Armour. Check out your portfolio center. Please also check ongoing floating volatility patterns of Afya and Under Armour.
Diversification Opportunities for Afya and Under Armour
0.37 | Correlation Coefficient |
Weak diversification
The 3 months correlation between Afya and Under is 0.37. Overlapping area represents the amount of risk that can be diversified away by holding Afya and Under Armour C in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Under Armour C 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 Under Armour. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Under Armour C has no effect on the direction of Afya i.e., Afya and Under Armour go up and down completely randomly.
Pair Corralation between Afya and Under Armour
Given the investment horizon of 90 days Afya is expected to generate 0.86 times more return on investment than Under Armour. However, Afya is 1.17 times less risky than Under Armour. It trades about 0.02 of its potential returns per unit of risk. Under Armour C is currently generating about 0.01 per unit of risk. If you would invest 1,507 in Afya on September 4, 2024 and sell it today you would earn a total of 152.00 from holding Afya or generate 10.09% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Afya vs. Under Armour C
Performance |
| Timeline |
| Afya |
| Under Armour C |
Afya and Under Armour Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Afya and Under Armour
The main advantage of trading using opposite Afya and Under Armour positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Afya position performs unexpectedly, Under Armour 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 Under Armour will offset losses from the drop in Under Armour's long position.| Afya vs. Laureate Education | Afya vs. Lincoln Educational Services | Afya vs. Adtalem Global Education | Afya vs. Strategic Education |
| Under Armour vs. Levi Strauss Co | Under Armour vs. Columbia Sportswear | Under Armour vs. Hanesbrands | Under Armour vs. PVH Corp |
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 File Import module to quickly import all of your third-party portfolios from your local drive in csv format.
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