Correlation Between Wheaton Precious and Axfood AB
Can any of the company-specific risk be diversified away by investing in both Wheaton Precious 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 Wheaton Precious and Axfood AB into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Wheaton Precious Metals and Axfood AB, you can compare the effects of market volatilities on Wheaton Precious 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 Wheaton Precious with a short position of Axfood AB. Check out your portfolio center. Please also check ongoing floating volatility patterns of Wheaton Precious and Axfood AB.
Diversification Opportunities for Wheaton Precious and Axfood AB
-0.49 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Wheaton and Axfood is -0.49. Overlapping area represents the amount of risk that can be diversified away by holding Wheaton Precious Metals and Axfood AB in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Axfood AB and Wheaton Precious 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 Wheaton Precious Metals 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 Wheaton Precious i.e., Wheaton Precious and Axfood AB go up and down completely randomly.
Pair Corralation between Wheaton Precious and Axfood AB
Assuming the 90 days trading horizon Wheaton Precious Metals is expected to generate 1.91 times more return on investment than Axfood AB. However, Wheaton Precious is 1.91 times more volatile than Axfood AB. It trades about 0.06 of its potential returns per unit of risk. Axfood AB is currently generating about -0.06 per unit of risk. If you would invest 409,847 in Wheaton Precious Metals on September 3, 2024 and sell it today you would earn a total of 75,153 from holding Wheaton Precious Metals or generate 18.34% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Wheaton Precious Metals vs. Axfood AB
Performance |
| Timeline |
| Wheaton Precious Metals |
| Axfood AB |
Wheaton Precious and Axfood AB Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Wheaton Precious and Axfood AB
The main advantage of trading using opposite Wheaton Precious and Axfood AB positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Wheaton Precious 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.| Wheaton Precious vs. Roper Technologies | Wheaton Precious vs. Microchip Technology | Wheaton Precious vs. Tyson Foods Cl | Wheaton Precious vs. Uber Technologies |
| Axfood AB vs. Catalyst Media Group | Axfood AB vs. CATLIN GROUP | Axfood AB vs. RTW Venture Fund | Axfood AB vs. Secure Property Development |
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 Efficient Frontier module to plot and analyze your portfolio and positions against risk-return landscape of the market..
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