Correlation Between Wealthsimple Shariah and AFC Ajax

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

By analyzing existing cross correlation between Wealthsimple Shariah World and AFC Ajax NV, you can compare the effects of market volatilities on Wealthsimple Shariah and AFC Ajax 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 Wealthsimple Shariah with a short position of AFC Ajax. Check out your portfolio center. Please also check ongoing floating volatility patterns of Wealthsimple Shariah and AFC Ajax.

Diversification Opportunities for Wealthsimple Shariah and AFC Ajax

-0.38

Correlation Coefficient

Wealthsimple Shariah  AFC Ajax

Very good diversification

The 3 months correlation between Wealthsimple and AFC is -0.38. Overlapping area represents the amount of risk that can be diversified away by holding Wealthsimple Shariah World and AFC Ajax NV in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on AFC Ajax NV and Wealthsimple Shariah 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 Wealthsimple Shariah World are associated (or correlated) with AFC Ajax. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of AFC Ajax NV has no effect on the direction of Wealthsimple Shariah i.e., Wealthsimple Shariah and AFC Ajax go up and down completely randomly.

Pair Corralation between Wealthsimple Shariah and AFC Ajax

Assuming the 90 days trading horizon Wealthsimple Shariah World is expected to generate 0.47 times more return on investment than AFC Ajax. However, Wealthsimple Shariah World is 2.13 times less risky than AFC Ajax. It trades about 0.05 of its potential returns per unit of risk. AFC Ajax NV is currently generating about 0.0 per unit of risk. If you would invest  3,201  in Wealthsimple Shariah World on September 7, 2025 and sell it today you would earn a total of  29.00  from holding Wealthsimple Shariah World or generate 0.91% return on investment over 90 days.

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

Wealthsimple Shariah World  vs.  AFC Ajax NV

Wealthsimple Shariah

Risk-Adjusted Performance

Weakest

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

AFC Ajax NV

Risk-Adjusted Performance

Weakest

Over the last 90 days AFC Ajax NV has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of comparatively stable basic indicators, AFC Ajax is not utilizing all of its potentials. The current stock price uproar, may contribute to short-horizon losses for the private investors.

Pair Trading with Wealthsimple Shariah and AFC Ajax

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

The idea behind Wealthsimple Shariah World and AFC Ajax NV 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 ETF Categories module to list of ETF categories grouped based on various criteria, such as the investment strategy or type of investments.