Correlation Between Afya and John Wiley
Can any of the company-specific risk be diversified away by investing in both Afya and John Wiley 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 John Wiley into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Afya and John Wiley Sons, you can compare the effects of market volatilities on Afya and John Wiley 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 John Wiley. Check out your portfolio center. Please also check ongoing floating volatility patterns of Afya and John Wiley.
Diversification Opportunities for Afya and John Wiley
0.52 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Afya and John is 0.52. Overlapping area represents the amount of risk that can be diversified away by holding Afya and John Wiley Sons in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on John Wiley Sons 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 John Wiley. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of John Wiley Sons has no effect on the direction of Afya i.e., Afya and John Wiley go up and down completely randomly.
Pair Corralation between Afya and John Wiley
Given the investment horizon of 90 days Afya is expected to generate 1.06 times more return on investment than John Wiley. However, Afya is 1.06 times more volatile than John Wiley Sons. It trades about -0.06 of its potential returns per unit of risk. John Wiley Sons is currently generating about -0.19 per unit of risk. If you would invest 1,763 in Afya on November 4, 2024 and sell it today you would lose (148.00) from holding Afya or give up 8.39% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 73.77% |
| Values | Daily Returns |
Afya vs. John Wiley Sons
Performance |
| Timeline |
| Afya |
| John Wiley Sons |
Afya and John Wiley Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Afya and John Wiley
The main advantage of trading using opposite Afya and John Wiley positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Afya position performs unexpectedly, John Wiley 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 John Wiley will offset losses from the drop in John Wiley's long position.| Afya vs. Adtalem Global Education | Afya vs. Laureate Education | Afya vs. American Public Education | Afya vs. Strategic Education |
| John Wiley vs. John Wiley Sons | John Wiley vs. Pearson PLC ADR | John Wiley vs. Scholastic | John Wiley vs. New York Times |
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 Idea Analyzer module to analyze all characteristics, volatility and risk-adjusted return of Macroaxis ideas.
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