Correlation Between Mineral Financial and Axfood AB
Can any of the company-specific risk be diversified away by investing in both Mineral Financial 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 Mineral Financial and Axfood AB into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Mineral Financial Investments and Axfood AB, you can compare the effects of market volatilities on Mineral Financial 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 Mineral Financial with a short position of Axfood AB. Check out your portfolio center. Please also check ongoing floating volatility patterns of Mineral Financial and Axfood AB.
Diversification Opportunities for Mineral Financial and Axfood AB
-0.48 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Mineral and Axfood is -0.48. Overlapping area represents the amount of risk that can be diversified away by holding Mineral Financial Investments and Axfood AB in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Axfood AB and Mineral Financial 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 Mineral Financial Investments 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 Mineral Financial i.e., Mineral Financial and Axfood AB go up and down completely randomly.
Pair Corralation between Mineral Financial and Axfood AB
Assuming the 90 days trading horizon Mineral Financial Investments is expected to generate 3.06 times more return on investment than Axfood AB. However, Mineral Financial is 3.06 times more volatile than Axfood AB. It trades about 0.33 of its potential returns per unit of risk. Axfood AB is currently generating about 0.08 per unit of risk. If you would invest 1,275 in Mineral Financial Investments on October 29, 2024 and sell it today you would earn a total of 275.00 from holding Mineral Financial Investments or generate 21.57% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 95.24% |
| Values | Daily Returns |
Mineral Financial Investments vs. Axfood AB
Performance |
| Timeline |
| Mineral Financial |
| Axfood AB |
Mineral Financial and Axfood AB Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Mineral Financial and Axfood AB
The main advantage of trading using opposite Mineral Financial and Axfood AB positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Mineral Financial 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.| Mineral Financial vs. Heavitree Brewery | Mineral Financial vs. Young Cos Brewery | Mineral Financial vs. Discover Financial Services | Mineral Financial vs. Sparebank 1 SR |
| Axfood AB vs. Associated British Foods | Axfood AB vs. Melia Hotels | Axfood AB vs. Fevertree Drinks Plc | Axfood AB vs. Wyndham Hotels Resorts |
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 Technical Analysis module to check basic technical indicators and analysis based on most latest market data.
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