Correlation Between Swift Foods and Axelum Resources

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

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

Diversification Opportunities for Swift Foods and Axelum Resources

0.21

Correlation Coefficient

Swift Foods  Axelum Resources

Modest diversification

The 3 months correlation between Swift and Axelum is 0.21. Overlapping area represents the amount of risk that can be diversified away by holding Swift Foods and Axelum Resources Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Axelum Resources Corp and Swift Foods 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 Swift Foods are associated (or correlated) with Axelum Resources. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Axelum Resources Corp has no effect on the direction of Swift Foods i.e., Swift Foods and Axelum Resources go up and down completely randomly.

Pair Corralation between Swift Foods and Axelum Resources

Assuming the 90 days trading horizon Swift Foods is expected to under-perform the Axelum Resources. In addition to that, Swift Foods is 1.51 times more volatile than Axelum Resources Corp. It trades about 0.0 of its total potential returns per unit of risk. Axelum Resources Corp is currently generating about 0.01 per unit of volatility. If you would invest  214.00  in Axelum Resources Corp on September 23, 2024 and sell it today you would lose (6.00) from holding Axelum Resources Corp or give up 2.8% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Very Weak
Accuracy	95.8%
Values	Daily Returns

Swift Foods  vs.  Axelum Resources Corp

Swift Foods

Risk-Adjusted Performance

1 of 100

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in Swift Foods are ranked lower than 1 (%) of all global equities and portfolios over the last 90 days. In spite of rather sound technical and fundamental indicators, Swift Foods is not utilizing all of its potentials. The newest stock price tumult, may contribute to shorter-term losses for the shareholders.

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.

Pair Trading with Swift Foods and Axelum Resources

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

The idea behind Swift Foods and Axelum Resources Corp 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 Pattern Recognition module to use different Pattern Recognition models to time the market across multiple global exchanges.