Correlation Between Fevertree Drinks and Afya
Can any of the company-specific risk be diversified away by investing in both Fevertree Drinks 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 Fevertree Drinks and Afya into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Fevertree Drinks Plc and Afya, you can compare the effects of market volatilities on Fevertree Drinks 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 Fevertree Drinks with a short position of Afya. Check out your portfolio center. Please also check ongoing floating volatility patterns of Fevertree Drinks and Afya.
Diversification Opportunities for Fevertree Drinks and Afya
-0.18 | Correlation Coefficient |
Good diversification
The 3 months correlation between Fevertree and Afya is -0.18. Overlapping area represents the amount of risk that can be diversified away by holding Fevertree Drinks Plc and Afya in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Afya and Fevertree Drinks 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 Fevertree Drinks Plc 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 Fevertree Drinks i.e., Fevertree Drinks and Afya go up and down completely randomly.
Pair Corralation between Fevertree Drinks and Afya
Assuming the 90 days horizon Fevertree Drinks Plc is expected to under-perform the Afya. In addition to that, Fevertree Drinks is 1.2 times more volatile than Afya. It trades about -0.02 of its total potential returns per unit of risk. Afya is currently generating about 0.02 per unit of volatility. If you would invest 1,437 in Afya on September 5, 2024 and sell it today you would earn a total of 159.00 from holding Afya or generate 11.06% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 80.4% |
| Values | Daily Returns |
Fevertree Drinks Plc vs. Afya
Performance |
| Timeline |
| Fevertree Drinks Plc |
| Afya |
Fevertree Drinks and Afya Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Fevertree Drinks and Afya
The main advantage of trading using opposite Fevertree Drinks and Afya positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Fevertree Drinks 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.| Fevertree Drinks vs. Greene Concepts | Fevertree Drinks vs. National Beverage Corp | Fevertree Drinks vs. Vita Coco | Fevertree Drinks vs. Hill Street Beverage |
| 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 Price Transformation module to use Price Transformation models to analyze the depth of different equity instruments across global markets.
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