Correlation Between Axfood AB and Caledonia Mining
Can any of the company-specific risk be diversified away by investing in both Axfood AB and Caledonia 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 Caledonia 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 Caledonia Mining, you can compare the effects of market volatilities on Axfood AB and Caledonia 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 Caledonia Mining. Check out your portfolio center. Please also check ongoing floating volatility patterns of Axfood AB and Caledonia Mining.
Diversification Opportunities for Axfood AB and Caledonia Mining
0.62 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Axfood and Caledonia is 0.62. Overlapping area represents the amount of risk that can be diversified away by holding Axfood AB and Caledonia Mining in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Caledonia 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 Caledonia Mining. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Caledonia Mining has no effect on the direction of Axfood AB i.e., Axfood AB and Caledonia Mining go up and down completely randomly.
Pair Corralation between Axfood AB and Caledonia Mining
Assuming the 90 days trading horizon Axfood AB is expected to generate 0.39 times more return on investment than Caledonia Mining. However, Axfood AB is 2.59 times less risky than Caledonia Mining. It trades about -0.11 of its potential returns per unit of risk. Caledonia Mining is currently generating about -0.24 per unit of risk. If you would invest 23,540 in Axfood AB on September 27, 2024 and sell it today you would lose (395.00) from holding Axfood AB or give up 1.68% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Axfood AB vs. Caledonia Mining
Performance |
| Timeline |
| Axfood AB |
| Caledonia Mining |
Axfood AB and Caledonia Mining Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Axfood AB and Caledonia Mining
The main advantage of trading using opposite Axfood AB and Caledonia Mining positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Axfood AB position performs unexpectedly, Caledonia 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 Caledonia Mining will offset losses from the drop in Caledonia Mining's long position.| Axfood AB vs. Uniper SE | Axfood AB vs. Mulberry Group PLC | Axfood AB vs. London Security Plc | Axfood AB vs. Triad Group PLC |
| Caledonia Mining vs. Cellnex Telecom SA | Caledonia Mining vs. Telecom Italia SpA | Caledonia Mining vs. Take Two Interactive Software | Caledonia Mining vs. Check Point Software |
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 Fundamentals Comparison module to compare fundamentals across multiple equities to find investing opportunities.
Other Complementary Tools
| Sign In To Macroaxis Sign in to explore Macroaxis' wealth optimization platform and fintech modules | |
| Competition Analyzer Analyze and compare many basic indicators for a group of related or unrelated entities | |
| Investing Opportunities Build portfolios using our predefined set of ideas and optimize them against your investing preferences | |
| Portfolio Optimization Compute new portfolio that will generate highest expected return given your specified tolerance for risk | |
| Share Portfolio Track or share privately all of your investments from the convenience of any device |