Correlation Between Afentra PLC and PetroShale

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

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

Diversification Opportunities for Afentra PLC and PetroShale

0.0

Correlation Coefficient

Afentra PLC  PetroShale

Pay attention - limited upside

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

Pair Corralation between Afentra PLC and PetroShale

If you would invest (100.00) in Afentra PLC on December 30, 2024 and sell it today you would earn a total of  100.00  from holding Afentra PLC or generate -100.0% return on investment over 90 days.

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

Afentra PLC  vs.  PetroShale

Afentra PLC

Risk-Adjusted Performance

Very Weak

Over the last 90 days Afentra PLC has generated negative risk-adjusted returns adding no value to investors with long positions. Despite nearly stable basic indicators, Afentra PLC is not utilizing all of its potentials. The recent stock price disturbance, may contribute to mid-run losses for the stockholders.

PetroShale

Risk-Adjusted Performance

Very Weak

Over the last 90 days PetroShale has generated negative risk-adjusted returns adding no value to investors with long positions. Despite nearly stable forward indicators, PetroShale is not utilizing all of its potentials. The current stock price disturbance, may contribute to mid-run losses for the stockholders.

Pair Trading with Afentra PLC and PetroShale

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

The idea behind Afentra PLC and PetroShale 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 Analyst Advice module to analyst recommendations and target price estimates broken down by several categories.