Correlation Between Axfood AB and CompuGroup Medical
Can any of the company-specific risk be diversified away by investing in both Axfood AB and CompuGroup Medical 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 CompuGroup Medical into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Axfood AB and CompuGroup Medical AG, you can compare the effects of market volatilities on Axfood AB and CompuGroup Medical 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 CompuGroup Medical. Check out your portfolio center. Please also check ongoing floating volatility patterns of Axfood AB and CompuGroup Medical.
Diversification Opportunities for Axfood AB and CompuGroup Medical
-0.38 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Axfood and CompuGroup is -0.38. Overlapping area represents the amount of risk that can be diversified away by holding Axfood AB and CompuGroup Medical AG in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on CompuGroup Medical 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 CompuGroup Medical. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of CompuGroup Medical has no effect on the direction of Axfood AB i.e., Axfood AB and CompuGroup Medical go up and down completely randomly.
Pair Corralation between Axfood AB and CompuGroup Medical
Assuming the 90 days trading horizon Axfood AB is expected to generate 0.43 times more return on investment than CompuGroup Medical. However, Axfood AB is 2.3 times less risky than CompuGroup Medical. It trades about -0.06 of its potential returns per unit of risk. CompuGroup Medical AG is currently generating about -0.11 per unit of risk. If you would invest 26,560 in Axfood AB on September 3, 2024 and sell it today you would lose (3,045) from holding Axfood AB or give up 11.46% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Axfood AB vs. CompuGroup Medical AG
Performance |
| Timeline |
| Axfood AB |
| CompuGroup Medical |
Axfood AB and CompuGroup Medical Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Axfood AB and CompuGroup Medical
The main advantage of trading using opposite Axfood AB and CompuGroup Medical positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Axfood AB position performs unexpectedly, CompuGroup Medical 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 CompuGroup Medical will offset losses from the drop in CompuGroup Medical's long position.| Axfood AB vs. Catalyst Media Group | Axfood AB vs. CATLIN GROUP | Axfood AB vs. RTW Venture Fund | Axfood AB vs. Secure Property Development |
| CompuGroup Medical vs. Martin Marietta Materials | CompuGroup Medical vs. Fresenius Medical Care | CompuGroup Medical vs. Ecofin Global Utilities | CompuGroup Medical vs. Summit Materials Cl |
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 ETF Categories module to list of ETF categories grouped based on various criteria, such as the investment strategy or type of investments.
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