Correlation Between Bid and Afrimat
Can any of the company-specific risk be diversified away by investing in both Bid and Afrimat 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 Bid and Afrimat into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Bid Corporation and Afrimat, you can compare the effects of market volatilities on Bid and Afrimat 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 Bid with a short position of Afrimat. Check out your portfolio center. Please also check ongoing floating volatility patterns of Bid and Afrimat.
Diversification Opportunities for Bid and Afrimat
Very good diversification
The 3 months correlation between Bid and Afrimat is -0.41. Overlapping area represents the amount of risk that can be diversified away by holding Bid Corp. and Afrimat in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Afrimat and Bid 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 Bid Corporation are associated (or correlated) with Afrimat. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Afrimat has no effect on the direction of Bid i.e., Bid and Afrimat go up and down completely randomly.
Pair Corralation between Bid and Afrimat
Assuming the 90 days trading horizon Bid Corporation is expected to under-perform the Afrimat. But the stock apears to be less risky and, when comparing its historical volatility, Bid Corporation is 1.26 times less risky than Afrimat. The stock trades about -0.02 of its potential returns per unit of risk. The Afrimat is currently generating about 0.01 of returns per unit of risk over similar time horizon. If you would invest 648,500 in Afrimat on September 3, 2024 and sell it today you would earn a total of 2,800 from holding Afrimat or generate 0.43% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Bid Corp. vs. Afrimat
Performance |
| Timeline |
| Bid Corporation |
| Afrimat |
Bid and Afrimat Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Bid and Afrimat
The main advantage of trading using opposite Bid and Afrimat positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Bid position performs unexpectedly, Afrimat 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 Afrimat will offset losses from the drop in Afrimat's long position.The idea behind Bid Corporation and Afrimat pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.| Afrimat vs. Deneb Investments | Afrimat vs. Frontier Transport Holdings | Afrimat vs. RCL Foods | Afrimat 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 Cryptocurrency Center module to build and monitor diversified portfolio of extremely risky digital assets and cryptocurrency.
Other Complementary Tools
| Odds Of Bankruptcy Get analysis of equity chance of financial distress in the next 2 years | |
| Crypto Correlations Use cryptocurrency correlation module to diversify your cryptocurrency portfolio across multiple coins | |
| Price Transformation Use Price Transformation models to analyze the depth of different equity instruments across global markets | |
| Sign In To Macroaxis Sign in to explore Macroaxis' wealth optimization platform and fintech modules | |
| Positions Ratings Determine portfolio positions ratings based on digital equity recommendations. Macroaxis instant position ratings are based on combination of fundamental analysis and risk-adjusted market performance |