Correlation Between Hf Foods and Afya
Can any of the company-specific risk be diversified away by investing in both Hf Foods 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 Hf Foods and Afya into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Hf Foods Group and Afya, you can compare the effects of market volatilities on Hf Foods 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 Hf Foods with a short position of Afya. Check out your portfolio center. Please also check ongoing floating volatility patterns of Hf Foods and Afya.
Diversification Opportunities for Hf Foods and Afya
Weak diversification
The 3 months correlation between HFFG and Afya is 0.34. Overlapping area represents the amount of risk that can be diversified away by holding Hf Foods Group and Afya in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Afya and Hf Foods 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 Hf Foods Group 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 Hf Foods i.e., Hf Foods and Afya go up and down completely randomly.
Pair Corralation between Hf Foods and Afya
Given the investment horizon of 90 days Hf Foods Group is expected to generate about the same return on investment as Afya. However, Hf Foods is 1.59 times more volatile than Afya. It trades about 0.01 of its potential returns per unit of risk. Afya is currently producing about 0.02 per unit of risk. If you would invest 1,504 in Afya on August 30, 2024 and sell it today you would earn a total of 169.00 from holding Afya or generate 11.24% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Hf Foods Group vs. Afya
Performance |
| Timeline |
| Hf Foods Group |
| Afya |
Hf Foods and Afya Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Hf Foods and Afya
The main advantage of trading using opposite Hf Foods and Afya positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Hf Foods 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.| Hf Foods vs. G Willi Food International | Hf Foods vs. Calavo Growers | Hf Foods vs. The Chefs Warehouse | Hf Foods vs. Performance Food 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 Pair Correlation module to compare performance and examine fundamental relationship between any two equity instruments.
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