Correlation Between GMéxico Transportes and Afya
Can any of the company-specific risk be diversified away by investing in both GMéxico Transportes 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 GMéxico Transportes and Afya into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between GMxico Transportes SAB and Afya, you can compare the effects of market volatilities on GMéxico Transportes 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 GMéxico Transportes with a short position of Afya. Check out your portfolio center. Please also check ongoing floating volatility patterns of GMéxico Transportes and Afya.
Diversification Opportunities for GMéxico Transportes and Afya
0.1 | Correlation Coefficient |
Average diversification
The 3 months correlation between GMéxico and Afya is 0.1. Overlapping area represents the amount of risk that can be diversified away by holding GMxico Transportes SAB and Afya in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Afya and GMéxico Transportes 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 GMxico Transportes SAB 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 GMéxico Transportes i.e., GMéxico Transportes and Afya go up and down completely randomly.
Pair Corralation between GMéxico Transportes and Afya
Assuming the 90 days horizon GMxico Transportes SAB is expected to generate 4.77 times more return on investment than Afya. However, GMéxico Transportes is 4.77 times more volatile than Afya. It trades about 0.19 of its potential returns per unit of risk. Afya is currently generating about 0.03 per unit of risk. If you would invest 110.00 in GMxico Transportes SAB on August 28, 2024 and sell it today you would earn a total of 45.00 from holding GMxico Transportes SAB or generate 40.91% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
GMxico Transportes SAB vs. Afya
Performance |
| Timeline |
| GMxico Transportes SAB |
| Afya |
GMéxico Transportes and Afya Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with GMéxico Transportes and Afya
The main advantage of trading using opposite GMéxico Transportes and Afya positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if GMéxico Transportes 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.| GMéxico Transportes vs. West Japan Railway | GMéxico Transportes vs. Central Japan Railway | GMéxico Transportes vs. LB Foster | GMéxico Transportes vs. Norfolk Southern |
| Afya vs. American Public Education | Afya vs. Lincoln Educational Services | Afya vs. Adtalem Global 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 Sync Your Broker module to sync your existing holdings, watchlists, positions or portfolios from thousands of online brokerage services, banks, investment account aggregators and robo-advisors..
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