Correlation Between Suntory Beverage and Afya
Can any of the company-specific risk be diversified away by investing in both Suntory Beverage 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 Suntory Beverage and Afya into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Suntory Beverage Food and Afya, you can compare the effects of market volatilities on Suntory Beverage 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 Suntory Beverage with a short position of Afya. Check out your portfolio center. Please also check ongoing floating volatility patterns of Suntory Beverage and Afya.
Diversification Opportunities for Suntory Beverage and Afya
0.39 | Correlation Coefficient |
Weak diversification
The 3 months correlation between Suntory and Afya is 0.39. Overlapping area represents the amount of risk that can be diversified away by holding Suntory Beverage Food and Afya in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Afya and Suntory Beverage 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 Suntory Beverage Food 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 Suntory Beverage i.e., Suntory Beverage and Afya go up and down completely randomly.
Pair Corralation between Suntory Beverage and Afya
Assuming the 90 days horizon Suntory Beverage is expected to generate 5.2 times less return on investment than Afya. But when comparing it to its historical volatility, Suntory Beverage Food is 1.94 times less risky than Afya. It trades about 0.04 of its potential returns per unit of risk. Afya is currently generating about 0.11 of returns per unit of risk over similar time horizon. If you would invest 1,558 in Afya on December 28, 2024 and sell it today you would earn a total of 229.00 from holding Afya or generate 14.7% return on investment over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Together |
Strength | Very Weak |
Accuracy | 98.36% |
Values | Daily Returns |
Suntory Beverage Food vs. Afya
Performance |
Timeline |
Suntory Beverage Food |
Afya |
Suntory Beverage and Afya Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with Suntory Beverage and Afya
The main advantage of trading using opposite Suntory Beverage and Afya positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Suntory Beverage 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.Suntory Beverage vs. Secom Co Ltd | Suntory Beverage vs. Mitsubishi Estate Co | Suntory Beverage vs. Shimano Inc ADR | Suntory Beverage vs. Sumitomo Chemical Co |
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 Volatility Analysis module to get historical volatility and risk analysis based on latest market data.
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