Correlation Between Invesco Physical and Axfood AB
Can any of the company-specific risk be diversified away by investing in both Invesco Physical 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 Invesco Physical and Axfood AB into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Invesco Physical Silver and Axfood AB, you can compare the effects of market volatilities on Invesco Physical 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 Invesco Physical with a short position of Axfood AB. Check out your portfolio center. Please also check ongoing floating volatility patterns of Invesco Physical and Axfood AB.
Diversification Opportunities for Invesco Physical and Axfood AB
0.23 | Correlation Coefficient |
Modest diversification
The 3 months correlation between Invesco and Axfood is 0.23. Overlapping area represents the amount of risk that can be diversified away by holding Invesco Physical Silver and Axfood AB in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Axfood AB and Invesco Physical 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 Invesco Physical Silver 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 Invesco Physical i.e., Invesco Physical and Axfood AB go up and down completely randomly.
Pair Corralation between Invesco Physical and Axfood AB
Assuming the 90 days trading horizon Invesco Physical Silver is expected to generate 1.21 times more return on investment than Axfood AB. However, Invesco Physical is 1.21 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 -0.2 per unit of risk. If you would invest 3,048 in Invesco Physical Silver on September 25, 2024 and sell it today you would lose (224.00) from holding Invesco Physical Silver or give up 7.35% of portfolio value over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Together |
Strength | Very Weak |
Accuracy | 100.0% |
Values | Daily Returns |
Invesco Physical Silver vs. Axfood AB
Performance |
Timeline |
Invesco Physical Silver |
Axfood AB |
Invesco Physical and Axfood AB Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with Invesco Physical and Axfood AB
The main advantage of trading using opposite Invesco Physical and Axfood AB positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Invesco Physical 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.Invesco Physical vs. Invesco Physical Gold | Invesco Physical vs. Invesco Physical Gold | Invesco Physical vs. Amundi Physical Gold | Invesco Physical vs. iShares Physical Silver |
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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 Investing Opportunities module to build portfolios using our predefined set of ideas and optimize them against your investing preferences.
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