Correlation Between Axfood AB and GoldMining

Can any of the company-specific risk be diversified away by investing in both Axfood AB and GoldMining 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 GoldMining into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between Axfood AB and GoldMining, you can compare the effects of market volatilities on Axfood AB and GoldMining 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 GoldMining. Check out your portfolio center. Please also check ongoing floating volatility patterns of Axfood AB and GoldMining.

Diversification Opportunities for Axfood AB and GoldMining

0.0

Correlation Coefficient

Axfood AB  GoldMining

Pay attention - limited upside

The 3 months correlation between Axfood and GoldMining is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding Axfood AB and GoldMining in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on GoldMining 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 GoldMining. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of GoldMining has no effect on the direction of Axfood AB i.e., Axfood AB and GoldMining go up and down completely randomly.

Pair Corralation between Axfood AB and GoldMining

Assuming the 90 days trading horizon Axfood AB is expected to generate 0.4 times more return on investment than GoldMining. However, Axfood AB is 2.49 times less risky than GoldMining. It trades about -0.1 of its potential returns per unit of risk. GoldMining is currently generating about -0.1 per unit of risk. If you would invest  23,490  in Axfood AB on September 24, 2024 and sell it today you would lose (345.00) from holding Axfood AB or give up 1.47% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Flat
Strength	Insignificant
Accuracy	85.71%
Values	Daily Returns

Axfood AB  vs.  GoldMining

Axfood AB

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Axfood AB has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of unsteady performance in the last few months, the Stock's basic indicators remain comparatively stable which may send shares a bit higher in January 2025. The newest uproar may also be a sign of mid-term up-swing for the firm private investors.

GoldMining

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days GoldMining has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of uncertain performance in the last few months, the Stock's basic indicators remain comparatively stable which may send shares a bit higher in January 2025. The newest uproar may also be a sign of mid-term up-swing for the firm private investors.

Pair Trading with Axfood AB and GoldMining

The main advantage of trading using opposite Axfood AB and GoldMining positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Axfood AB position performs unexpectedly, GoldMining 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 GoldMining will offset losses from the drop in GoldMining's long position.

The idea behind Axfood AB and GoldMining pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.

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.