Correlation Between Axfood AB and Silvercorp Metals
Can any of the company-specific risk be diversified away by investing in both Axfood AB and Silvercorp Metals 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 Silvercorp Metals into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Axfood AB and Silvercorp Metals, you can compare the effects of market volatilities on Axfood AB and Silvercorp Metals 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 Silvercorp Metals. Check out your portfolio center. Please also check ongoing floating volatility patterns of Axfood AB and Silvercorp Metals.
Diversification Opportunities for Axfood AB and Silvercorp Metals
0.15 | Correlation Coefficient |
Average diversification
The 3 months correlation between Axfood and Silvercorp is 0.15. Overlapping area represents the amount of risk that can be diversified away by holding Axfood AB and Silvercorp Metals in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Silvercorp Metals 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 Silvercorp Metals. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Silvercorp Metals has no effect on the direction of Axfood AB i.e., Axfood AB and Silvercorp Metals go up and down completely randomly.
Pair Corralation between Axfood AB and Silvercorp Metals
Assuming the 90 days trading horizon Axfood AB is expected to generate 0.23 times more return on investment than Silvercorp Metals. However, Axfood AB is 4.36 times less risky than Silvercorp Metals. It trades about 0.02 of its potential returns per unit of risk. Silvercorp Metals is currently generating about -0.36 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 | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Axfood AB vs. Silvercorp Metals
Performance |
| Timeline |
| Axfood AB |
| Silvercorp Metals |
Axfood AB and Silvercorp Metals Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Axfood AB and Silvercorp Metals
The main advantage of trading using opposite Axfood AB and Silvercorp Metals positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Axfood AB position performs unexpectedly, Silvercorp Metals 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 Silvercorp Metals will offset losses from the drop in Silvercorp Metals' 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 |
| Silvercorp Metals vs. Neometals | Silvercorp Metals vs. Coor Service Management | Silvercorp Metals vs. Aeorema Communications Plc | Silvercorp Metals vs. JLEN Environmental Assets |
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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