Correlation Between China Liberal and Afya
Can any of the company-specific risk be diversified away by investing in both China Liberal and Afya 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 China Liberal and Afya into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between China Liberal Education and Afya, you can compare the effects of market volatilities on China Liberal and Afya 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 China Liberal with a short position of Afya. Check out your portfolio center. Please also check ongoing floating volatility patterns of China Liberal and Afya.
Diversification Opportunities for China Liberal and Afya
-0.37 | Correlation Coefficient |
Very good diversification
The 3 months correlation between China and Afya is -0.37. Overlapping area represents the amount of risk that can be diversified away by holding China Liberal Education and Afya in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Afya and China Liberal 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 China Liberal Education are associated (or correlated) with Afya. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Afya has no effect on the direction of China Liberal i.e., China Liberal and Afya go up and down completely randomly.
Pair Corralation between China Liberal and Afya
Given the investment horizon of 90 days China Liberal Education is expected to under-perform the Afya. In addition to that, China Liberal is 16.0 times more volatile than Afya. It trades about -0.05 of its total potential returns per unit of risk. Afya is currently generating about 0.15 per unit of volatility. If you would invest 1,588 in Afya on November 1, 2024 and sell it today you would earn a total of 73.00 from holding Afya or generate 4.6% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
China Liberal Education vs. Afya
Performance |
| Timeline |
| China Liberal Education |
| Afya |
China Liberal and Afya Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with China Liberal and Afya
The main advantage of trading using opposite China Liberal and Afya positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if China Liberal position performs unexpectedly, Afya 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 Afya will offset losses from the drop in Afya's long position.| China Liberal vs. Lixiang Education Holding | China Liberal vs. Four Seasons Education | China Liberal vs. Jianzhi Education Technology | China Liberal vs. Elite Education Group |
| Afya vs. Adtalem Global Education | Afya vs. Laureate Education | Afya vs. American Public Education | Afya vs. Strategic Education |
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 Portfolio Comparator module to compare the composition, asset allocations and performance of any two portfolios in your account.
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