Correlation Between Alfa Financial and Apax Global
Can any of the company-specific risk be diversified away by investing in both Alfa Financial and Apax Global 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 Alfa Financial and Apax Global into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Alfa Financial Software and Apax Global Alpha, you can compare the effects of market volatilities on Alfa Financial and Apax Global 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 Alfa Financial with a short position of Apax Global. Check out your portfolio center. Please also check ongoing floating volatility patterns of Alfa Financial and Apax Global.
Diversification Opportunities for Alfa Financial and Apax Global
0.33 | Correlation Coefficient |
Weak diversification
The 3 months correlation between Alfa and Apax is 0.33. Overlapping area represents the amount of risk that can be diversified away by holding Alfa Financial Software and Apax Global Alpha in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Apax Global Alpha and Alfa Financial 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 Alfa Financial Software are associated (or correlated) with Apax Global. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Apax Global Alpha has no effect on the direction of Alfa Financial i.e., Alfa Financial and Apax Global go up and down completely randomly.
Pair Corralation between Alfa Financial and Apax Global
Assuming the 90 days trading horizon Alfa Financial Software is expected to generate 1.33 times more return on investment than Apax Global. However, Alfa Financial is 1.33 times more volatile than Apax Global Alpha. It trades about 0.04 of its potential returns per unit of risk. Apax Global Alpha is currently generating about -0.02 per unit of risk. If you would invest 14,996 in Alfa Financial Software on September 14, 2024 and sell it today you would earn a total of 6,854 from holding Alfa Financial Software or generate 45.71% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 99.6% |
| Values | Daily Returns |
Alfa Financial Software vs. Apax Global Alpha
Performance |
| Timeline |
| Alfa Financial Software |
| Apax Global Alpha |
Alfa Financial and Apax Global Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Alfa Financial and Apax Global
The main advantage of trading using opposite Alfa Financial and Apax Global positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Alfa Financial position performs unexpectedly, Apax Global 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 Apax Global will offset losses from the drop in Apax Global's long position.| Alfa Financial vs. National Beverage Corp | Alfa Financial vs. Tyson Foods Cl | Alfa Financial vs. McEwen Mining | Alfa Financial vs. Anglesey Mining |
| Apax Global vs. Spotify Technology SA | Apax Global vs. Cognizant Technology Solutions | Apax Global vs. Alfa Financial Software | Apax Global vs. Ocean Harvest Technology |
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 Breakdown module to analyze constituents of all Macroaxis ideas. Macroaxis investment ideas are predefined, sector-focused investing themes.
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