Correlation Between Tesla and Afya
Can any of the company-specific risk be diversified away by investing in both Tesla 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 Tesla and Afya into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Tesla Inc and Afya, you can compare the effects of market volatilities on Tesla 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 Tesla with a short position of Afya. Check out your portfolio center. Please also check ongoing floating volatility patterns of Tesla and Afya.
Diversification Opportunities for Tesla and Afya
Excellent diversification
The 3 months correlation between Tesla and Afya is -0.66. Overlapping area represents the amount of risk that can be diversified away by holding Tesla Inc and Afya in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Afya and Tesla 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 Tesla Inc 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 Tesla i.e., Tesla and Afya go up and down completely randomly.
Pair Corralation between Tesla and Afya
Given the investment horizon of 90 days Tesla Inc is expected to under-perform the Afya. In addition to that, Tesla is 2.04 times more volatile than Afya. It trades about -0.33 of its total potential returns per unit of risk. Afya is currently generating about 0.17 per unit of volatility. If you would invest 1,495 in Afya on December 11, 2024 and sell it today you would earn a total of 202.00 from holding Afya or generate 13.51% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Tesla Inc vs. Afya
Performance |
| Timeline |
| Tesla Inc |
| Afya |
Tesla and Afya Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Tesla and Afya
The main advantage of trading using opposite Tesla and Afya positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Tesla 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.The idea behind Tesla Inc and Afya pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.| 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 Content Syndication module to quickly integrate customizable finance content to your own investment portal.
Other Complementary Tools
| Portfolio Comparator Compare the composition, asset allocations and performance of any two portfolios in your account | |
| Fundamental Analysis View fundamental data based on most recent published financial statements | |
| Performance Analysis Check effects of mean-variance optimization against your current asset allocation | |
| Theme Ratings Determine theme ratings based on digital equity recommendations. Macroaxis theme ratings are based on combination of fundamental analysis and risk-adjusted market performance | |
| Companies Directory Evaluate performance of over 100,000 Stocks, Funds, and ETFs against different fundamentals |