Correlation Between Golden Star and Afya
Can any of the company-specific risk be diversified away by investing in both Golden Star 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 Golden Star and Afya into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Golden Star Acquisition and Afya, you can compare the effects of market volatilities on Golden Star 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 Golden Star with a short position of Afya. Check out your portfolio center. Please also check ongoing floating volatility patterns of Golden Star and Afya.
Diversification Opportunities for Golden Star and Afya
0.09 | Correlation Coefficient |
Significant diversification
The 3 months correlation between Golden and Afya is 0.09. Overlapping area represents the amount of risk that can be diversified away by holding Golden Star Acquisition and Afya in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Afya and Golden Star 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 Golden Star Acquisition 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 Golden Star i.e., Golden Star and Afya go up and down completely randomly.
Pair Corralation between Golden Star and Afya
Assuming the 90 days horizon Golden Star Acquisition is expected to generate 0.32 times more return on investment than Afya. However, Golden Star Acquisition is 3.11 times less risky than Afya. It trades about 0.05 of its potential returns per unit of risk. Afya is currently generating about -0.22 per unit of risk. If you would invest 1,140 in Golden Star Acquisition on September 13, 2024 and sell it today you would earn a total of 9.00 from holding Golden Star Acquisition or generate 0.79% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Golden Star Acquisition vs. Afya
Performance |
| Timeline |
| Golden Star Acquisition |
| Afya |
Golden Star and Afya Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Golden Star and Afya
The main advantage of trading using opposite Golden Star and Afya positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Golden Star 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.| Golden Star vs. Franklin Wireless Corp | Golden Star vs. Tower One Wireless | Golden Star vs. Iridium Communications | Golden Star vs. Western Digital |
| 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 Odds Of Bankruptcy module to get analysis of equity chance of financial distress in the next 2 years.
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