Correlation Between Afcon Holdings and Payton L
Can any of the company-specific risk be diversified away by investing in both Afcon Holdings and Payton L 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 Afcon Holdings and Payton L into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Afcon Holdings and Payton L, you can compare the effects of market volatilities on Afcon Holdings and Payton L 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 Afcon Holdings with a short position of Payton L. Check out your portfolio center. Please also check ongoing floating volatility patterns of Afcon Holdings and Payton L.
Diversification Opportunities for Afcon Holdings and Payton L
0.19 | Correlation Coefficient |
Average diversification
The 3 months correlation between Afcon and Payton is 0.19. Overlapping area represents the amount of risk that can be diversified away by holding Afcon Holdings and Payton L in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Payton L and Afcon Holdings 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 Afcon Holdings are associated (or correlated) with Payton L. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Payton L has no effect on the direction of Afcon Holdings i.e., Afcon Holdings and Payton L go up and down completely randomly.
Pair Corralation between Afcon Holdings and Payton L
Assuming the 90 days trading horizon Afcon Holdings is expected to under-perform the Payton L. But the stock apears to be less risky and, when comparing its historical volatility, Afcon Holdings is 2.25 times less risky than Payton L. The stock trades about -0.16 of its potential returns per unit of risk. The Payton L is currently generating about 0.15 of returns per unit of risk over similar time horizon. If you would invest 602,600 in Payton L on January 26, 2024 and sell it today you would earn a total of 42,400 from holding Payton L or generate 7.04% return on investment over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Together |
Strength | Insignificant |
Accuracy | 100.0% |
Values | Daily Returns |
Afcon Holdings vs. Payton L
Performance |
Timeline |
Afcon Holdings |
Payton L |
Afcon Holdings and Payton L Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with Afcon Holdings and Payton L
The main advantage of trading using opposite Afcon Holdings and Payton L positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Afcon Holdings position performs unexpectedly, Payton L 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 Payton L will offset losses from the drop in Payton L's long position.Afcon Holdings vs. Alony Hetz Properties | Afcon Holdings vs. Melisron | Afcon Holdings vs. Shufersal | Afcon Holdings vs. Israel Discount Bank |
Payton L vs. Alony Hetz Properties | Payton L vs. Melisron | Payton L vs. Shufersal | Payton L vs. Israel Discount Bank |
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 Top Crypto Exchanges module to search and analyze digital assets across top global cryptocurrency exchanges.
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