Correlation Between Afine Investments and Frontier Transport
Can any of the company-specific risk be diversified away by investing in both Afine Investments and Frontier Transport 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 Afine Investments and Frontier Transport into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Afine Investments and Frontier Transport Holdings, you can compare the effects of market volatilities on Afine Investments and Frontier Transport 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 Afine Investments with a short position of Frontier Transport. Check out your portfolio center. Please also check ongoing floating volatility patterns of Afine Investments and Frontier Transport.
Diversification Opportunities for Afine Investments and Frontier Transport
-0.23 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Afine and Frontier is -0.23. Overlapping area represents the amount of risk that can be diversified away by holding Afine Investments and Frontier Transport Holdings in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Frontier Transport and Afine Investments 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 Afine Investments are associated (or correlated) with Frontier Transport. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Frontier Transport has no effect on the direction of Afine Investments i.e., Afine Investments and Frontier Transport go up and down completely randomly.
Pair Corralation between Afine Investments and Frontier Transport
Assuming the 90 days trading horizon Afine Investments is expected to generate 0.01 times more return on investment than Frontier Transport. However, Afine Investments is 95.46 times less risky than Frontier Transport. It trades about 0.22 of its potential returns per unit of risk. Frontier Transport Holdings is currently generating about -0.06 per unit of risk. If you would invest 40,000 in Afine Investments on August 27, 2024 and sell it today you would earn a total of 100.00 from holding Afine Investments or generate 0.25% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Afine Investments vs. Frontier Transport Holdings
Performance |
| Timeline |
| Afine Investments |
| Frontier Transport |
Afine Investments and Frontier Transport Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Afine Investments and Frontier Transport
The main advantage of trading using opposite Afine Investments and Frontier Transport positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Afine Investments position performs unexpectedly, Frontier Transport 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 Frontier Transport will offset losses from the drop in Frontier Transport's long position.| Afine Investments vs. Schroder European Real | Afine Investments vs. Centaur Bci Balanced | Afine Investments vs. Sabvest Capital | Afine Investments vs. Growthpoint Properties |
| Frontier Transport vs. Centaur Bci Balanced | Frontier Transport vs. Growthpoint Properties | Frontier Transport vs. Bowler Metcalf | Frontier Transport vs. Shoprite Holdings |
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 Top Crypto Exchanges module to search and analyze digital assets across top global cryptocurrency exchanges.
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