Correlation Between Wah Fu and Afya
Can any of the company-specific risk be diversified away by investing in both Wah Fu 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 Wah Fu and Afya into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Wah Fu Education and Afya, you can compare the effects of market volatilities on Wah Fu 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 Wah Fu with a short position of Afya. Check out your portfolio center. Please also check ongoing floating volatility patterns of Wah Fu and Afya.
Diversification Opportunities for Wah Fu and Afya
Modest diversification
The 3 months correlation between Wah and Afya is 0.25. Overlapping area represents the amount of risk that can be diversified away by holding Wah Fu Education and Afya in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Afya and Wah Fu 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 Wah Fu Education 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 Wah Fu i.e., Wah Fu and Afya go up and down completely randomly.
Pair Corralation between Wah Fu and Afya
Given the investment horizon of 90 days Wah Fu is expected to generate 1.63 times less return on investment than Afya. In addition to that, Wah Fu is 3.66 times more volatile than Afya. It trades about 0.02 of its total potential returns per unit of risk. Afya is currently generating about 0.09 per unit of volatility. If you would invest 1,591 in Afya on December 25, 2024 and sell it today you would earn a total of 193.00 from holding Afya or generate 12.13% return on investment over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Together |
Strength | Very Weak |
Accuracy | 100.0% |
Values | Daily Returns |
Wah Fu Education vs. Afya
Performance |
Timeline |
Wah Fu Education |
Afya |
Wah Fu and Afya Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with Wah Fu and Afya
The main advantage of trading using opposite Wah Fu and Afya positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Wah Fu 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.Wah Fu vs. Four Seasons Education | Wah Fu vs. Sunlands Technology Group | Wah Fu vs. 51Talk Online Education | Wah Fu vs. Golden Sun Education |
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 Money Flow Index module to determine momentum by analyzing Money Flow Index and other technical indicators.
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