Correlation Between Leroy Seafood and Axfood AB
Can any of the company-specific risk be diversified away by investing in both Leroy Seafood 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 Leroy Seafood and Axfood AB into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Leroy Seafood Group and Axfood AB, you can compare the effects of market volatilities on Leroy Seafood 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 Leroy Seafood with a short position of Axfood AB. Check out your portfolio center. Please also check ongoing floating volatility patterns of Leroy Seafood and Axfood AB.
Diversification Opportunities for Leroy Seafood and Axfood AB
-0.38 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Leroy and Axfood is -0.38. Overlapping area represents the amount of risk that can be diversified away by holding Leroy Seafood Group and Axfood AB in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Axfood AB and Leroy Seafood 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 Leroy Seafood Group 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 Leroy Seafood i.e., Leroy Seafood and Axfood AB go up and down completely randomly.
Pair Corralation between Leroy Seafood and Axfood AB
Assuming the 90 days trading horizon Leroy Seafood Group is expected to under-perform the Axfood AB. In addition to that, Leroy Seafood is 1.7 times more volatile than Axfood AB. It trades about -0.02 of its total potential returns per unit of risk. Axfood AB is currently generating about 0.02 per unit of volatility. If you would invest 23,570 in Axfood AB on August 30, 2024 and sell it today you would earn a total of 60.00 from holding Axfood AB or generate 0.25% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 95.65% |
| Values | Daily Returns |
Leroy Seafood Group vs. Axfood AB
Performance |
| Timeline |
| Leroy Seafood Group |
| Axfood AB |
Leroy Seafood and Axfood AB Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Leroy Seafood and Axfood AB
The main advantage of trading using opposite Leroy Seafood and Axfood AB positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Leroy Seafood 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.| Leroy Seafood vs. National Beverage Corp | Leroy Seafood vs. Batm Advanced Communications | Leroy Seafood vs. Check Point Software | Leroy Seafood vs. Microchip Technology |
| Axfood AB vs. Roper Technologies | Axfood AB vs. Albion Technology General | Axfood AB vs. AIM ImmunoTech | Axfood AB vs. Ecclesiastical Insurance Office |
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 Equity Valuation module to check real value of public entities based on technical and fundamental data.
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