Correlation Between IShares Physical and Axfood AB
Can any of the company-specific risk be diversified away by investing in both IShares Physical and Axfood AB 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 IShares Physical and Axfood AB into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between iShares Physical Silver and Axfood AB, you can compare the effects of market volatilities on IShares Physical and Axfood AB 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 IShares Physical with a short position of Axfood AB. Check out your portfolio center. Please also check ongoing floating volatility patterns of IShares Physical and Axfood AB.
Diversification Opportunities for IShares Physical and Axfood AB
0.26 | Correlation Coefficient |
Modest diversification
The 3 months correlation between IShares and Axfood is 0.26. Overlapping area represents the amount of risk that can be diversified away by holding iShares Physical Silver and Axfood AB in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Axfood AB and IShares Physical 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 iShares Physical Silver are associated (or correlated) with Axfood AB. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Axfood AB has no effect on the direction of IShares Physical i.e., IShares Physical and Axfood AB go up and down completely randomly.
Pair Corralation between IShares Physical and Axfood AB
Assuming the 90 days trading horizon iShares Physical Silver is expected to under-perform the Axfood AB. In addition to that, IShares Physical is 2.44 times more volatile than Axfood AB. It trades about -0.08 of its total potential returns per unit of risk. Axfood AB is currently generating about -0.11 per unit of volatility. 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 | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
iShares Physical Silver vs. Axfood AB
Performance |
| Timeline |
| iShares Physical Silver |
| Axfood AB |
IShares Physical and Axfood AB Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with IShares Physical and Axfood AB
The main advantage of trading using opposite IShares Physical and Axfood AB positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if IShares Physical position performs unexpectedly, Axfood AB 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 Axfood AB will offset losses from the drop in Axfood AB's long position.| IShares Physical vs. Invesco Physical Gold | IShares Physical vs. Invesco Physical Gold | IShares Physical vs. Amundi Physical Gold | IShares Physical vs. iShares Physical Silver |
| Axfood AB vs. Uniper SE | Axfood AB vs. Mulberry Group PLC | Axfood AB vs. London Security Plc | Axfood AB vs. Triad Group PLC |
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 Money Managers module to screen money managers from public funds and ETFs managed around the world.
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