Correlation Between Afine Investments and Orion Gold
Can any of the company-specific risk be diversified away by investing in both Afine Investments and Orion Gold 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 Orion Gold into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Afine Investments and Orion Gold NL, you can compare the effects of market volatilities on Afine Investments and Orion Gold 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 Orion Gold. Check out your portfolio center. Please also check ongoing floating volatility patterns of Afine Investments and Orion Gold.
Diversification Opportunities for Afine Investments and Orion Gold
-0.35 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Afine and Orion is -0.35. Overlapping area represents the amount of risk that can be diversified away by holding Afine Investments and Orion Gold NL in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Orion Gold NL 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 Orion Gold. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Orion Gold NL has no effect on the direction of Afine Investments i.e., Afine Investments and Orion Gold go up and down completely randomly.
Pair Corralation between Afine Investments and Orion Gold
Assuming the 90 days trading horizon Afine Investments is expected to generate 0.62 times more return on investment than Orion Gold. However, Afine Investments is 1.62 times less risky than Orion Gold. It trades about 0.25 of its potential returns per unit of risk. Orion Gold NL is currently generating about -0.03 per unit of risk. If you would invest 40,000 in Afine Investments on September 5, 2024 and sell it today you would earn a total of 6,000 from holding Afine Investments or generate 15.0% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 95.65% |
| Values | Daily Returns |
Afine Investments vs. Orion Gold NL
Performance |
| Timeline |
| Afine Investments |
| Orion Gold NL |
Afine Investments and Orion Gold Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Afine Investments and Orion Gold
The main advantage of trading using opposite Afine Investments and Orion Gold positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Afine Investments position performs unexpectedly, Orion Gold 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 Orion Gold will offset losses from the drop in Orion Gold's long position.| Afine Investments vs. Sasol Ltd Bee | Afine Investments vs. Centaur Bci Balanced | Afine Investments vs. Sabvest Capital | Afine Investments vs. Growthpoint Properties |
| Orion Gold vs. Afine Investments | Orion Gold vs. Deneb Investments | Orion Gold vs. Bytes Technology | Orion Gold vs. Life Healthcare |
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 Commodity Channel module to use Commodity Channel Index to analyze current equity momentum.
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