Correlation Between Afya and Yotta Acquisition

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

By analyzing existing cross correlation between Afya and Yotta Acquisition Corp, you can compare the effects of market volatilities on Afya and Yotta Acquisition 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 Yotta Acquisition. Check out your portfolio center. Please also check ongoing floating volatility patterns of Afya and Yotta Acquisition.

Diversification Opportunities for Afya and Yotta Acquisition

0.42

Correlation Coefficient

Afya  Yotta Acquisition

Very weak diversification

The 3 months correlation between Afya and Yotta is 0.42. Overlapping area represents the amount of risk that can be diversified away by holding Afya and Yotta Acquisition Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Yotta Acquisition Corp 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 Yotta Acquisition. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Yotta Acquisition Corp has no effect on the direction of Afya i.e., Afya and Yotta Acquisition go up and down completely randomly.

Pair Corralation between Afya and Yotta Acquisition

Given the investment horizon of 90 days Afya is expected to under-perform the Yotta Acquisition. In addition to that, Afya is 1.74 times more volatile than Yotta Acquisition Corp. It trades about -0.04 of its total potential returns per unit of risk. Yotta Acquisition Corp is currently generating about 0.02 per unit of volatility. If you would invest  1,119  in Yotta Acquisition Corp on September 17, 2024 and sell it today you would earn a total of  15.00  from holding Yotta Acquisition Corp or generate 1.34% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Weak
Accuracy	100.0%
Values	Daily Returns

Afya  vs.  Yotta Acquisition Corp

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 latest stock price disturbance, may contribute to short-term losses for the investors.

Yotta Acquisition Corp

Risk-Adjusted Performance

1 of 100

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in Yotta Acquisition Corp are ranked lower than 1 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively stable basic indicators, Yotta Acquisition is not utilizing all of its potentials. The newest stock price uproar, may contribute to short-horizon losses for the private investors.

Pair Trading with Afya and Yotta Acquisition

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

The idea behind Afya and Yotta Acquisition Corp 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 Technical Analysis module to check basic technical indicators and analysis based on most latest market data.