Correlation Between Edgewell Personal and Afya
Can any of the company-specific risk be diversified away by investing in both Edgewell Personal 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 Edgewell Personal and Afya into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Edgewell Personal Care and Afya, you can compare the effects of market volatilities on Edgewell Personal 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 Edgewell Personal with a short position of Afya. Check out your portfolio center. Please also check ongoing floating volatility patterns of Edgewell Personal and Afya.
Diversification Opportunities for Edgewell Personal and Afya
-0.28 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Edgewell and Afya is -0.28. Overlapping area represents the amount of risk that can be diversified away by holding Edgewell Personal Care and Afya in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Afya and Edgewell Personal 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 Edgewell Personal Care 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 Edgewell Personal i.e., Edgewell Personal and Afya go up and down completely randomly.
Pair Corralation between Edgewell Personal and Afya
Considering the 90-day investment horizon Edgewell Personal Care is expected to under-perform the Afya. In addition to that, Edgewell Personal is 1.14 times more volatile than Afya. It trades about -0.1 of its total potential returns per unit of risk. Afya is currently generating about 0.05 per unit of volatility. If you would invest 1,646 in Afya on November 29, 2024 and sell it today you would earn a total of 34.00 from holding Afya or generate 2.07% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Edgewell Personal Care vs. Afya
Performance |
| Timeline |
| Edgewell Personal Care |
| Afya |
Edgewell Personal and Afya Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Edgewell Personal and Afya
The main advantage of trading using opposite Edgewell Personal and Afya positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Edgewell Personal 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.| Edgewell Personal vs. Mannatech Incorporated | Edgewell Personal vs. Inter Parfums | Edgewell Personal vs. Nu Skin Enterprises | Edgewell Personal vs. Helen of Troy |
| 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 Equity Valuation module to check real value of public entities based on technical and fundamental data.
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