Correlation Between Axelum Resources and Bank of the

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

By analyzing existing cross correlation between Axelum Resources Corp and Bank of the, you can compare the effects of market volatilities on Axelum Resources and Bank of the 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 Axelum Resources with a short position of Bank of the. Check out your portfolio center. Please also check ongoing floating volatility patterns of Axelum Resources and Bank of the.

Diversification Opportunities for Axelum Resources and Bank of the

0.6

Correlation Coefficient

Axelum Resources  Bank of the

Poor diversification

The 3 months correlation between Axelum and Bank is 0.6. Overlapping area represents the amount of risk that can be diversified away by holding Axelum Resources Corp and Bank of the in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Bank of the and Axelum Resources 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 Axelum Resources Corp are associated (or correlated) with Bank of the. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Bank of the has no effect on the direction of Axelum Resources i.e., Axelum Resources and Bank of the go up and down completely randomly.

Pair Corralation between Axelum Resources and Bank of the

Assuming the 90 days trading horizon Axelum Resources Corp is expected to under-perform the Bank of the. In addition to that, Axelum Resources is 1.59 times more volatile than Bank of the. It trades about 0.0 of its total potential returns per unit of risk. Bank of the is currently generating about 0.05 per unit of volatility. If you would invest  8,429  in Bank of the on September 24, 2024 and sell it today you would earn a total of  3,721  from holding Bank of the or generate 44.15% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Significant
Accuracy	94.64%
Values	Daily Returns

Axelum Resources Corp  vs.  Bank of the

Axelum Resources Corp

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Axelum Resources Corp has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of comparatively stable basic indicators, Axelum Resources is not utilizing all of its potentials. The newest stock price uproar, may contribute to short-horizon losses for the private investors.

Bank of the

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Bank of the has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of latest weak performance, the Stock's technical and fundamental indicators remain sound and the latest tumult on Wall Street may also be a sign of longer-term gains for the firm shareholders.

Pair Trading with Axelum Resources and Bank of the

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

The idea behind Axelum Resources Corp and Bank of the 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 Technical Analysis module to check basic technical indicators and analysis based on most latest market data.