Correlation Between Afya and MBGGR

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

By analyzing existing cross correlation between Afya and MBGGR 145 02 MAR 26, you can compare the effects of market volatilities on Afya and MBGGR 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 MBGGR. Check out your portfolio center. Please also check ongoing floating volatility patterns of Afya and MBGGR.

Diversification Opportunities for Afya and MBGGR

0.1

Correlation Coefficient

Afya  MBGGR

Average diversification

The 3 months correlation between Afya and MBGGR is 0.1. Overlapping area represents the amount of risk that can be diversified away by holding Afya and MBGGR 145 02 MAR 26 in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on MBGGR 145 02 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 MBGGR. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of MBGGR 145 02 has no effect on the direction of Afya i.e., Afya and MBGGR go up and down completely randomly.

Pair Corralation between Afya and MBGGR

Given the investment horizon of 90 days Afya is expected to generate 1.66 times more return on investment than MBGGR. However, Afya is 1.66 times more volatile than MBGGR 145 02 MAR 26. It trades about -0.02 of its potential returns per unit of risk. MBGGR 145 02 MAR 26 is currently generating about -0.16 per unit of risk. If you would invest  1,616  in Afya on September 23, 2024 and sell it today you would lose (66.00) from holding Afya or give up 4.08% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Insignificant
Accuracy	58.46%
Values	Daily Returns

Afya  vs.  MBGGR 145 02 MAR 26

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 somewhat strong basic indicators, Afya is not utilizing all of its potentials. The newest stock price disturbance, may contribute to short-term losses for the investors.

MBGGR 145 02

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days MBGGR 145 02 MAR 26 has generated negative risk-adjusted returns adding no value to investors with long positions. Despite latest inconsistent performance, the Bond's basic indicators remain strong and the current disturbance on Wall Street may also be a sign of long term gains for MBGGR 145 02 MAR 26 investors.

Pair Trading with Afya and MBGGR

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

The idea behind Afya and MBGGR 145 02 MAR 26 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.

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 Companies Directory module to evaluate performance of over 100,000 Stocks, Funds, and ETFs against different fundamentals.