Correlation Between Afya and IX Acquisition

Can any of the company-specific risk be diversified away by investing in both Afya and IX Acquisition 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 Afya and IX Acquisition into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between Afya and IX Acquisition Corp, you can compare the effects of market volatilities on Afya and IX Acquisition 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 Afya with a short position of IX Acquisition. Check out your portfolio center. Please also check ongoing floating volatility patterns of Afya and IX Acquisition.

Diversification Opportunities for Afya and IX Acquisition

0.0

Correlation Coefficient

Afya  IX Acquisition

Pay attention - limited upside

The 3 months correlation between Afya and IXAQU is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding Afya and IX Acquisition Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on IX Acquisition Corp and Afya 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 Afya are associated (or correlated) with IX Acquisition. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of IX Acquisition Corp has no effect on the direction of Afya i.e., Afya and IX Acquisition go up and down completely randomly.

Pair Corralation between Afya and IX Acquisition

If you would invest  1,558  in Afya on December 28, 2024 and sell it today you would earn a total of  242.00  from holding Afya or generate 15.53% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Flat
Strength	Insignificant
Accuracy	0.0%
Values	Daily Returns

Afya  vs.  IX Acquisition Corp

Afya

Risk-Adjusted Performance

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Afya are ranked lower than 8 (%) of all global equities and portfolios over the last 90 days. Despite somewhat unsteady basic indicators, Afya sustained solid returns over the last few months and may actually be approaching a breakup point.

IX Acquisition Corp

Risk-Adjusted Performance

Very Weak

Over the last 90 days IX Acquisition Corp has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of comparatively stable basic indicators, IX Acquisition is not utilizing all of its potentials. The current stock price uproar, may contribute to short-horizon losses for the private investors.

Pair Trading with Afya and IX Acquisition

The main advantage of trading using opposite Afya and IX Acquisition positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Afya position performs unexpectedly, IX Acquisition 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 IX Acquisition will offset losses from the drop in IX Acquisition's long position.

The idea behind Afya and IX Acquisition Corp 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.

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 Portfolio Center module to all portfolio management and optimization tools to improve performance of your portfolios.