Correlation Between Afine Investments and Kore Potash
Can any of the company-specific risk be diversified away by investing in both Afine Investments and Kore Potash 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 Kore Potash into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Afine Investments and Kore Potash Plc, you can compare the effects of market volatilities on Afine Investments and Kore Potash 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 Kore Potash. Check out your portfolio center. Please also check ongoing floating volatility patterns of Afine Investments and Kore Potash.
Diversification Opportunities for Afine Investments and Kore Potash
-0.47 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Afine and Kore is -0.47. Overlapping area represents the amount of risk that can be diversified away by holding Afine Investments and Kore Potash Plc in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Kore Potash Plc 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 Kore Potash. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Kore Potash Plc has no effect on the direction of Afine Investments i.e., Afine Investments and Kore Potash go up and down completely randomly.
Pair Corralation between Afine Investments and Kore Potash
Assuming the 90 days trading horizon Afine Investments is expected to generate 0.38 times more return on investment than Kore Potash. However, Afine Investments is 2.62 times less risky than Kore Potash. It trades about 0.22 of its potential returns per unit of risk. Kore Potash Plc is currently generating about -0.02 per unit of risk. If you would invest 40,000 in Afine Investments on August 29, 2024 and sell it today you would earn a total of 5,000 from holding Afine Investments or generate 12.5% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Afine Investments vs. Kore Potash Plc
Performance |
| Timeline |
| Afine Investments |
| Kore Potash Plc |
Afine Investments and Kore Potash Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Afine Investments and Kore Potash
The main advantage of trading using opposite Afine Investments and Kore Potash positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Afine Investments position performs unexpectedly, Kore Potash 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 Kore Potash will offset losses from the drop in Kore Potash's long position.| Afine Investments vs. Centaur Bci Balanced | Afine Investments vs. Sabvest Capital | Afine Investments vs. Growthpoint Properties | Afine Investments vs. Bowler Metcalf |
| Kore Potash vs. E Media Holdings | Kore Potash vs. Afine Investments | Kore Potash vs. Deneb Investments | Kore Potash vs. Astral Foods |
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 Theme Ratings module to determine theme ratings based on digital equity recommendations. Macroaxis theme ratings are based on combination of fundamental analysis and risk-adjusted market performance.
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