Correlation Between Afya and Fly E

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

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

Diversification Opportunities for Afya and Fly E

0.57

Correlation Coefficient

Afya  Fly E

Very weak diversification

The 3 months correlation between Afya and Fly is 0.57. Overlapping area represents the amount of risk that can be diversified away by holding Afya and Fly E Group, Common in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Fly E Group, and Afya 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 Afya are associated (or correlated) with Fly E. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Fly E Group, has no effect on the direction of Afya i.e., Afya and Fly E go up and down completely randomly.

Pair Corralation between Afya and Fly E

Given the investment horizon of 90 days Afya is expected to generate 0.18 times more return on investment than Fly E. However, Afya is 5.49 times less risky than Fly E. It trades about 0.02 of its potential returns per unit of risk. Fly E Group, Common is currently generating about -0.12 per unit of risk. If you would invest  1,439  in Afya on September 27, 2024 and sell it today you would earn a total of  118.00  from holding Afya or generate 8.2% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Weak
Accuracy	28.57%
Values	Daily Returns

Afya  vs.  Fly E Group, Common

Afya

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Afya has generated negative risk-adjusted returns adding no value to investors with long positions. Despite latest inconsistent performance, the Stock's basic indicators remain strong and the current disturbance on Wall Street may also be a sign of long term gains for the company investors.

Fly E Group,

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Fly E Group, Common has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of inconsistent performance in the last few months, the Stock's basic indicators remain rather sound which may send shares a bit higher in January 2025. The latest tumult may also be a sign of longer-term up-swing for the firm shareholders.

Pair Trading with Afya and Fly E

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

The idea behind Afya and Fly E Group, Common 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 Manager module to state of the art Portfolio Manager to monitor and improve performance of your invested capital.