Correlation Between Afine Investments and Alexander Forbes

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

By analyzing existing cross correlation between Afine Investments and Alexander Forbes Grp, you can compare the effects of market volatilities on Afine Investments and Alexander Forbes 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 Afine Investments with a short position of Alexander Forbes. Check out your portfolio center. Please also check ongoing floating volatility patterns of Afine Investments and Alexander Forbes.

Diversification Opportunities for Afine Investments and Alexander Forbes

0.16

Correlation Coefficient

Afine Investments  Alexander Forbes

Average diversification

The 3 months correlation between Afine and Alexander is 0.16. Overlapping area represents the amount of risk that can be diversified away by holding Afine Investments and Alexander Forbes Grp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Alexander Forbes Grp and Afine Investments 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 Afine Investments are associated (or correlated) with Alexander Forbes. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Alexander Forbes Grp has no effect on the direction of Afine Investments i.e., Afine Investments and Alexander Forbes go up and down completely randomly.

Pair Corralation between Afine Investments and Alexander Forbes

Assuming the 90 days trading horizon Afine Investments is expected to generate 1.87 times less return on investment than Alexander Forbes. In addition to that, Afine Investments is 1.43 times more volatile than Alexander Forbes Grp. It trades about 0.08 of its total potential returns per unit of risk. Alexander Forbes Grp is currently generating about 0.2 per unit of volatility. If you would invest  74,000  in Alexander Forbes Grp on September 24, 2024 and sell it today you would earn a total of  9,000  from holding Alexander Forbes Grp or generate 12.16% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Insignificant
Accuracy	95.0%
Values	Daily Returns

Afine Investments  vs.  Alexander Forbes Grp

Afine Investments

Risk-Adjusted Performance

8 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Afine Investments are ranked lower than 8 (%) of all global equities and portfolios over the last 90 days. In spite of rather unsteady technical and fundamental indicators, Afine Investments exhibited solid returns over the last few months and may actually be approaching a breakup point.

Alexander Forbes Grp

Risk-Adjusted Performance

11 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Alexander Forbes Grp are ranked lower than 11 (%) of all global equities and portfolios over the last 90 days. In spite of rather unsteady technical and fundamental indicators, Alexander Forbes exhibited solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Afine Investments and Alexander Forbes

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

The idea behind Afine Investments and Alexander Forbes Grp 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.

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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 File Import module to quickly import all of your third-party portfolios from your local drive in csv format.