Correlation Between Afine Investments and Reunert
Can any of the company-specific risk be diversified away by investing in both Afine Investments and Reunert 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 Reunert into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Afine Investments and Reunert, you can compare the effects of market volatilities on Afine Investments and Reunert 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 Reunert. Check out your portfolio center. Please also check ongoing floating volatility patterns of Afine Investments and Reunert.
Diversification Opportunities for Afine Investments and Reunert
-0.52 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Afine and Reunert is -0.52. Overlapping area represents the amount of risk that can be diversified away by holding Afine Investments and Reunert in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Reunert 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 Reunert. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Reunert has no effect on the direction of Afine Investments i.e., Afine Investments and Reunert go up and down completely randomly.
Pair Corralation between Afine Investments and Reunert
Assuming the 90 days trading horizon Afine Investments is expected to generate 83.44 times more return on investment than Reunert. However, Afine Investments is 83.44 times more volatile than Reunert. It trades about 0.1 of its potential returns per unit of risk. Reunert is currently generating about 0.07 per unit of risk. If you would invest 38,178 in Afine Investments on September 2, 2024 and sell it today you would earn a total of 6,822 from holding Afine Investments or generate 17.87% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 99.59% |
| Values | Daily Returns |
Afine Investments vs. Reunert
Performance |
| Timeline |
| Afine Investments |
| Reunert |
Afine Investments and Reunert Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Afine Investments and Reunert
The main advantage of trading using opposite Afine Investments and Reunert positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Afine Investments position performs unexpectedly, Reunert 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 Reunert will offset losses from the drop in Reunert's long position.| Afine Investments vs. Kumba Iron Ore | Afine Investments vs. Zeder Investments | Afine Investments vs. Harmony Gold Mining | Afine Investments vs. Astral Foods |
| Reunert vs. British American Tobacco | Reunert vs. Bytes Technology | Reunert vs. Deneb Investments | Reunert vs. HomeChoice Investments |
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 Piotroski F Score module to get Piotroski F Score based on the binary analysis strategy of nine different fundamentals.
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