Correlation Between BEAU VALLON and AFREXIMBANK

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

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

Diversification Opportunities for BEAU VALLON and AFREXIMBANK

0.37

Correlation Coefficient

BEAU VALLON  AFREXIMBANK

Weak diversification

The 3 months correlation between BEAU and AFREXIMBANK is 0.37. Overlapping area represents the amount of risk that can be diversified away by holding BEAU VALLON HOSPITAL and AFREXIMBANK in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on AFREXIMBANK and BEAU VALLON 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 BEAU VALLON HOSPITAL are associated (or correlated) with AFREXIMBANK. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of AFREXIMBANK has no effect on the direction of BEAU VALLON i.e., BEAU VALLON and AFREXIMBANK go up and down completely randomly.

Pair Corralation between BEAU VALLON and AFREXIMBANK

Assuming the 90 days trading horizon BEAU VALLON HOSPITAL is expected to under-perform the AFREXIMBANK. In addition to that, BEAU VALLON is 37.16 times more volatile than AFREXIMBANK. It trades about -0.03 of its total potential returns per unit of risk. AFREXIMBANK is currently generating about -0.07 per unit of volatility. If you would invest  271.00  in AFREXIMBANK on September 12, 2024 and sell it today you would lose (1.00) from holding AFREXIMBANK or give up 0.37% of portfolio value over 90 days.

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

BEAU VALLON HOSPITAL  vs.  AFREXIMBANK

BEAU VALLON HOSPITAL

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days BEAU VALLON HOSPITAL has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of latest unsteady performance, the Stock's primary indicators remain healthy and the recent disarray on Wall Street may also be a sign of long period gains for the firm investors.

AFREXIMBANK

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days AFREXIMBANK has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of rather sound technical and fundamental indicators, AFREXIMBANK is not utilizing all of its potentials. The latest stock price tumult, may contribute to shorter-term losses for the shareholders.

Pair Trading with BEAU VALLON and AFREXIMBANK

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

The idea behind BEAU VALLON HOSPITAL and AFREXIMBANK 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 Sectors module to list of equity sectors categorizing publicly traded companies based on their primary business activities.