Correlation Between Axfood AB and Systemair
Can any of the company-specific risk be diversified away by investing in both Axfood AB and Systemair 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 Axfood AB and Systemair into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Axfood AB and Systemair AB, you can compare the effects of market volatilities on Axfood AB and Systemair 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 Axfood AB with a short position of Systemair. Check out your portfolio center. Please also check ongoing floating volatility patterns of Axfood AB and Systemair.
Diversification Opportunities for Axfood AB and Systemair
Significant diversification
The 3 months correlation between Axfood and Systemair is 0.04. Overlapping area represents the amount of risk that can be diversified away by holding Axfood AB and Systemair AB in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Systemair AB and Axfood AB 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 Axfood AB are associated (or correlated) with Systemair. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Systemair AB has no effect on the direction of Axfood AB i.e., Axfood AB and Systemair go up and down completely randomly.
Pair Corralation between Axfood AB and Systemair
Assuming the 90 days trading horizon Axfood AB is expected to under-perform the Systemair. But the stock apears to be less risky and, when comparing its historical volatility, Axfood AB is 1.42 times less risky than Systemair. The stock trades about -0.03 of its potential returns per unit of risk. The Systemair AB is currently generating about 0.04 of returns per unit of risk over similar time horizon. If you would invest 7,879 in Systemair AB on August 25, 2024 and sell it today you would earn a total of 1,201 from holding Systemair AB or generate 15.24% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 99.57% |
| Values | Daily Returns |
Axfood AB vs. Systemair AB
Performance |
| Timeline |
| Axfood AB |
| Systemair AB |
Axfood AB and Systemair Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Axfood AB and Systemair
The main advantage of trading using opposite Axfood AB and Systemair positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Axfood AB position performs unexpectedly, Systemair 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 Systemair will offset losses from the drop in Systemair's long position.| Axfood AB vs. Polar Capital Technology | Axfood AB vs. Albion Technology General | Axfood AB vs. Microchip Technology | Axfood AB vs. Concurrent Technologies Plc |
| Systemair vs. Samsung Electronics Co | Systemair vs. Samsung Electronics Co | Systemair vs. Hyundai Motor | Systemair vs. Toyota Motor Corp |
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 Balance Of Power module to check stock momentum by analyzing Balance Of Power indicator and other technical ratios.
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