Correlation Between Afya and Zovio
Can any of the company-specific risk be diversified away by investing in both Afya and Zovio 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 Zovio into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Afya and Zovio Inc, you can compare the effects of market volatilities on Afya and Zovio 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 Zovio. Check out your portfolio center. Please also check ongoing floating volatility patterns of Afya and Zovio.
Diversification Opportunities for Afya and Zovio
Very good diversification
The 3 months correlation between Afya and Zovio is -0.23. Overlapping area represents the amount of risk that can be diversified away by holding Afya and Zovio Inc in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Zovio Inc 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 Zovio. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Zovio Inc has no effect on the direction of Afya i.e., Afya and Zovio go up and down completely randomly.
Pair Corralation between Afya and Zovio
Given the investment horizon of 90 days Afya is expected to generate 56.48 times less return on investment than Zovio. But when comparing it to its historical volatility, Afya is 10.69 times less risky than Zovio. It trades about 0.02 of its potential returns per unit of risk. Zovio Inc is currently generating about 0.11 of returns per unit of risk over similar time horizon. If you would invest 0.80 in Zovio Inc on August 30, 2024 and sell it today you would earn a total of 0.10 from holding Zovio Inc or generate 12.5% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 7.86% |
| Values | Daily Returns |
Afya vs. Zovio Inc
Performance |
| Timeline |
| Afya |
| Zovio Inc |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
Afya and Zovio Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Afya and Zovio
The main advantage of trading using opposite Afya and Zovio positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Afya position performs unexpectedly, Zovio 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 Zovio will offset losses from the drop in Zovio's long position.| Afya vs. Laureate Education | Afya vs. Strategic Education | Afya vs. Grand Canyon Education | Afya vs. American Public 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 Volatility Analysis module to get historical volatility and risk analysis based on latest market data.
Other Complementary Tools
| Bonds Directory Find actively traded corporate debentures issued by US companies | |
| Transaction History View history of all your transactions and understand their impact on performance | |
| CEOs Directory Screen CEOs from public companies around the world | |
| Instant Ratings Determine any equity ratings based on digital recommendations. Macroaxis instant equity ratings are based on combination of fundamental analysis and risk-adjusted market performance | |
| Companies Directory Evaluate performance of over 100,000 Stocks, Funds, and ETFs against different fundamentals |