Correlation Between Axfood AB and McEwen Mining
Can any of the company-specific risk be diversified away by investing in both Axfood AB and McEwen Mining 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 Axfood AB and McEwen Mining into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Axfood AB and McEwen Mining, you can compare the effects of market volatilities on Axfood AB and McEwen Mining 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 Axfood AB with a short position of McEwen Mining. Check out your portfolio center. Please also check ongoing floating volatility patterns of Axfood AB and McEwen Mining.
Diversification Opportunities for Axfood AB and McEwen Mining
0.31 | Correlation Coefficient |
Weak diversification
The 3 months correlation between Axfood and McEwen is 0.31. Overlapping area represents the amount of risk that can be diversified away by holding Axfood AB and McEwen Mining in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on McEwen Mining and Axfood AB 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 Axfood AB are associated (or correlated) with McEwen Mining. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of McEwen Mining has no effect on the direction of Axfood AB i.e., Axfood AB and McEwen Mining go up and down completely randomly.
Pair Corralation between Axfood AB and McEwen Mining
Assuming the 90 days trading horizon Axfood AB is expected to generate 0.46 times more return on investment than McEwen Mining. However, Axfood AB is 2.19 times less risky than McEwen Mining. It trades about 0.02 of its potential returns per unit of risk. McEwen Mining is currently generating about -0.4 per unit of risk. If you would invest 23,600 in Axfood AB on August 31, 2024 and sell it today you would earn a total of 90.00 from holding Axfood AB or generate 0.38% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Axfood AB vs. McEwen Mining
Performance |
| Timeline |
| Axfood AB |
| McEwen Mining |
Axfood AB and McEwen Mining Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Axfood AB and McEwen Mining
The main advantage of trading using opposite Axfood AB and McEwen Mining positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Axfood AB position performs unexpectedly, McEwen Mining 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 McEwen Mining will offset losses from the drop in McEwen Mining's long position.| Axfood AB vs. Take Two Interactive Software | Axfood AB vs. Melia Hotels | Axfood AB vs. Microchip Technology | Axfood AB vs. Compagnie Plastic Omnium |
| McEwen Mining vs. Datalogic | McEwen Mining vs. Federal Realty Investment | McEwen Mining vs. Bankers Investment Trust | McEwen Mining vs. Automatic Data Processing |
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 Earnings Calls module to check upcoming earnings announcements updated hourly across public exchanges.
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