Correlation Between Lixiang Education and Afya
Can any of the company-specific risk be diversified away by investing in both Lixiang Education 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 Lixiang Education and Afya into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Lixiang Education Holding and Afya, you can compare the effects of market volatilities on Lixiang Education 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 Lixiang Education with a short position of Afya. Check out your portfolio center. Please also check ongoing floating volatility patterns of Lixiang Education and Afya.
Diversification Opportunities for Lixiang Education and Afya
-0.06 | Correlation Coefficient |
Good diversification
The 3 months correlation between Lixiang and Afya is -0.06. Overlapping area represents the amount of risk that can be diversified away by holding Lixiang Education Holding and Afya in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Afya and Lixiang Education 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 Lixiang Education Holding 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 Lixiang Education i.e., Lixiang Education and Afya go up and down completely randomly.
Pair Corralation between Lixiang Education and Afya
Given the investment horizon of 90 days Lixiang Education Holding is expected to generate 4.87 times more return on investment than Afya. However, Lixiang Education is 4.87 times more volatile than Afya. It trades about 0.44 of its potential returns per unit of risk. Afya is currently generating about -0.18 per unit of risk. If you would invest 240.00 in Lixiang Education Holding on September 24, 2024 and sell it today you would earn a total of 314.00 from holding Lixiang Education Holding or generate 130.83% return on investment over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Against |
Strength | Insignificant |
Accuracy | 100.0% |
Values | Daily Returns |
Lixiang Education Holding vs. Afya
Performance |
Timeline |
Lixiang Education Holding |
Afya |
Lixiang Education and Afya Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with Lixiang Education and Afya
The main advantage of trading using opposite Lixiang Education and Afya positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Lixiang Education 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.Lixiang Education vs. China Liberal Education | ||
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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 Latest Portfolios module to quick portfolio dashboard that showcases your latest portfolios.
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