Correlation Between Afya and Unum
Can any of the company-specific risk be diversified away by investing in both Afya and Unum 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 Unum into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Afya and Unum Group, you can compare the effects of market volatilities on Afya and Unum 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 Unum. Check out your portfolio center. Please also check ongoing floating volatility patterns of Afya and Unum.
Diversification Opportunities for Afya and Unum
Very good diversification
The 3 months correlation between Afya and Unum is -0.3. Overlapping area represents the amount of risk that can be diversified away by holding Afya and Unum Group in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Unum Group 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 Unum. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Unum Group has no effect on the direction of Afya i.e., Afya and Unum go up and down completely randomly.
Pair Corralation between Afya and Unum
Given the investment horizon of 90 days Afya is expected to generate 2.83 times more return on investment than Unum. However, Afya is 2.83 times more volatile than Unum Group. It trades about 0.02 of its potential returns per unit of risk. Unum Group is currently generating about 0.04 per unit of risk. If you would invest 1,535 in Afya on September 12, 2024 and sell it today you would earn a total of 70.00 from holding Afya or generate 4.56% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Afya vs. Unum Group
Performance |
| Timeline |
| Afya |
| Unum Group |
Afya and Unum Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Afya and Unum
The main advantage of trading using opposite Afya and Unum positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Afya position performs unexpectedly, Unum 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 Unum will offset losses from the drop in Unum's long position.| Afya vs. Adtalem Global Education | Afya vs. Laureate Education | Afya vs. American Public Education | Afya vs. Strategic Education |
| Unum vs. Suburban Propane Partners | Unum vs. Sun Country Airlines | Unum vs. Afya | Unum vs. Yuexiu Transport Infrastructure |
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 Pair Correlation module to compare performance and examine fundamental relationship between any two equity instruments.
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