Correlation Between AfriTin Mining and Axfood AB

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Can any of the company-specific risk be diversified away by investing in both AfriTin Mining 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 AfriTin Mining and Axfood AB into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between AfriTin Mining and Axfood AB, you can compare the effects of market volatilities on AfriTin Mining 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 AfriTin Mining with a short position of Axfood AB. Check out your portfolio center. Please also check ongoing floating volatility patterns of AfriTin Mining and Axfood AB.

Diversification Opportunities for AfriTin Mining and Axfood AB

AfriTinAxfoodDiversified AwayAfriTinAxfoodDiversified Away100%
0.88
  Correlation Coefficient

Very poor diversification

The 3 months correlation between AfriTin and Axfood is 0.88. Overlapping area represents the amount of risk that can be diversified away by holding AfriTin Mining and Axfood AB in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Axfood AB and AfriTin Mining 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 AfriTin Mining 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 AfriTin Mining i.e., AfriTin Mining and Axfood AB go up and down completely randomly.

Pair Corralation between AfriTin Mining and Axfood AB

Assuming the 90 days trading horizon AfriTin Mining is expected to under-perform the Axfood AB. In addition to that, AfriTin Mining is 2.51 times more volatile than Axfood AB. It trades about -0.17 of its total potential returns per unit of risk. Axfood AB is currently generating about -0.21 per unit of volatility. If you would invest  28,670  in Axfood AB on October 1, 2024 and sell it today you would lose (5,470) from holding Axfood AB or give up 19.08% of portfolio value over 90 days.
Time Period3 Months [change]
DirectionMoves Together 
StrengthStrong
Accuracy100.0%
ValuesDaily Returns

AfriTin Mining  vs.  Axfood AB

 Performance 
JavaScript chart by amCharts 3.21.15OctNovDec -30-20-100
JavaScript chart by amCharts 3.21.15ATM 0R6R
       Timeline  
AfriTin Mining 

Risk-Adjusted Performance

0 of 100

 
Weak
 
Strong
Very Weak
Over the last 90 days AfriTin Mining 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 technical and fundamental indicators remain rather sound which may send shares a bit higher in January 2025. The latest tumult may also be a sign of longer-term up-swing for the firm shareholders.
JavaScript chart by amCharts 3.21.15NovDecDec2.22.42.62.833.23.43.6
Axfood AB 

Risk-Adjusted Performance

0 of 100

 
Weak
 
Strong
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.
JavaScript chart by amCharts 3.21.15NovDecDec230240250260270280

AfriTin Mining and Axfood AB Volatility Contrast

   Predicted Return Density   
JavaScript chart by amCharts 3.21.15-6.42-4.81-3.2-1.58-0.02691.342.714.085.45 0.050.100.15
JavaScript chart by amCharts 3.21.15ATM 0R6R
       Returns  

Pair Trading with AfriTin Mining and Axfood AB

The main advantage of trading using opposite AfriTin Mining and Axfood AB positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if AfriTin Mining 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.
The idea behind AfriTin Mining and Axfood AB 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 Fundamentals Comparison module to compare fundamentals across multiple equities to find investing opportunities.

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