Correlation Between Afya and Wah Fu
Can any of the company-specific risk be diversified away by investing in both Afya and Wah Fu 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 Wah Fu into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Afya and Wah Fu Education, you can compare the effects of market volatilities on Afya and Wah Fu 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 Wah Fu. Check out your portfolio center. Please also check ongoing floating volatility patterns of Afya and Wah Fu.
Diversification Opportunities for Afya and Wah Fu
Good diversification
The 3 months correlation between Afya and Wah is -0.02. Overlapping area represents the amount of risk that can be diversified away by holding Afya and Wah Fu Education in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Wah Fu Education 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 Wah Fu. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Wah Fu Education has no effect on the direction of Afya i.e., Afya and Wah Fu go up and down completely randomly.
Pair Corralation between Afya and Wah Fu
Given the investment horizon of 90 days Afya is expected to generate 0.64 times more return on investment than Wah Fu. However, Afya is 1.55 times less risky than Wah Fu. It trades about 0.02 of its potential returns per unit of risk. Wah Fu Education is currently generating about 0.0 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. Wah Fu Education
Performance |
| Timeline |
| Afya |
| Wah Fu Education |
Afya and Wah Fu Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Afya and Wah Fu
The main advantage of trading using opposite Afya and Wah Fu positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Afya position performs unexpectedly, Wah Fu 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 Wah Fu will offset losses from the drop in Wah Fu's long position.| Afya vs. Adtalem Global Education | Afya vs. Laureate Education | Afya vs. American Public Education | Afya vs. Strategic Education |
| Wah Fu vs. Four Seasons Education | Wah Fu vs. Sunlands Technology Group | Wah Fu vs. 51Talk Online Education | Wah Fu vs. Golden Sun Education |
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 Watchlist Optimization module to optimize watchlists to build efficient portfolios or rebalance existing positions based on the mean-variance optimization algorithm.
Other Complementary Tools
| Financial Widgets Easily integrated Macroaxis content with over 30 different plug-and-play financial widgets | |
| Efficient Frontier Plot and analyze your portfolio and positions against risk-return landscape of the market. | |
| Risk-Return Analysis View associations between returns expected from investment and the risk you assume | |
| Sign In To Macroaxis Sign in to explore Macroaxis' wealth optimization platform and fintech modules | |
| Portfolio Comparator Compare the composition, asset allocations and performance of any two portfolios in your account |