Correlation Between Axfood AB and Wheaton Precious
Can any of the company-specific risk be diversified away by investing in both Axfood AB and Wheaton Precious 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 Wheaton Precious into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Axfood AB and Wheaton Precious Metals, you can compare the effects of market volatilities on Axfood AB and Wheaton Precious 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 Wheaton Precious. Check out your portfolio center. Please also check ongoing floating volatility patterns of Axfood AB and Wheaton Precious.
Diversification Opportunities for Axfood AB and Wheaton Precious
0.35 | Correlation Coefficient |
Weak diversification
The 3 months correlation between Axfood and Wheaton is 0.35. Overlapping area represents the amount of risk that can be diversified away by holding Axfood AB and Wheaton Precious Metals in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Wheaton Precious 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 Wheaton Precious. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Wheaton Precious Metals has no effect on the direction of Axfood AB i.e., Axfood AB and Wheaton Precious go up and down completely randomly.
Pair Corralation between Axfood AB and Wheaton Precious
Assuming the 90 days trading horizon Axfood AB is expected to generate 2.19 times less return on investment than Wheaton Precious. But when comparing it to its historical volatility, Axfood AB is 1.47 times less risky than Wheaton Precious. It trades about 0.15 of its potential returns per unit of risk. Wheaton Precious Metals is currently generating about 0.22 of returns per unit of risk over similar time horizon. If you would invest 470,000 in Wheaton Precious Metals on November 2, 2024 and sell it today you would earn a total of 33,500 from holding Wheaton Precious Metals or generate 7.13% 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. Wheaton Precious Metals
Performance |
Timeline |
Axfood AB |
Wheaton Precious Metals |
Axfood AB and Wheaton Precious Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with Axfood AB and Wheaton Precious
The main advantage of trading using opposite Axfood AB and Wheaton Precious positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Axfood AB position performs unexpectedly, Wheaton Precious 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 Wheaton Precious will offset losses from the drop in Wheaton Precious' long position.Axfood AB vs. Auction Technology Group | Axfood AB vs. Ashtead Technology Holdings | Axfood AB vs. Cembra Money Bank | Axfood AB vs. Global Net Lease |
Wheaton Precious vs. Empire Metals Limited | Wheaton Precious vs. New Residential Investment | Wheaton Precious vs. Kinnevik Investment AB | Wheaton Precious vs. GreenX Metals |
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 Equity Forecasting module to use basic forecasting models to generate price predictions and determine price momentum.
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