Correlation Between Axfood AB and Anglo Asian

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

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

Diversification Opportunities for Axfood AB and Anglo Asian

-0.1

Correlation Coefficient

Axfood AB  Anglo Asian

Good diversification

The 3 months correlation between Axfood and Anglo is -0.1. Overlapping area represents the amount of risk that can be diversified away by holding Axfood AB and Anglo Asian Mining in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Anglo Asian Mining 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 Anglo Asian. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Anglo Asian Mining has no effect on the direction of Axfood AB i.e., Axfood AB and Anglo Asian go up and down completely randomly.

Pair Corralation between Axfood AB and Anglo Asian

Assuming the 90 days trading horizon Axfood AB is expected to under-perform the Anglo Asian. But the stock apears to be less risky and, when comparing its historical volatility, Axfood AB is 2.06 times less risky than Anglo Asian. The stock trades about -0.18 of its potential returns per unit of risk. The Anglo Asian Mining is currently generating about 0.11 of returns per unit of risk over similar time horizon. If you would invest  8,700  in Anglo Asian Mining on September 23, 2024 and sell it today you would earn a total of  1,900  from holding Anglo Asian Mining or generate 21.84% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Insignificant
Accuracy	100.0%
Values	Daily Returns

Axfood AB  vs.  Anglo Asian Mining

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.

Anglo Asian Mining

Risk-Adjusted Performance

8 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Anglo Asian Mining are ranked lower than 8 (%) of all global equities and portfolios over the last 90 days. In spite of rather uncertain technical and fundamental indicators, Anglo Asian exhibited solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Axfood AB and Anglo Asian

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

The idea behind Axfood AB and Anglo Asian Mining 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.

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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 Odds Of Bankruptcy module to get analysis of equity chance of financial distress in the next 2 years.