Correlation Between Axfood AB and ALSO Holding
Can any of the company-specific risk be diversified away by investing in both Axfood AB and ALSO Holding 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 ALSO Holding into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Axfood AB and ALSO Holding AG, you can compare the effects of market volatilities on Axfood AB and ALSO Holding 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 ALSO Holding. Check out your portfolio center. Please also check ongoing floating volatility patterns of Axfood AB and ALSO Holding.
Diversification Opportunities for Axfood AB and ALSO Holding
0.94 | Correlation Coefficient |
Almost no diversification
The 3 months correlation between Axfood and ALSO is 0.94. Overlapping area represents the amount of risk that can be diversified away by holding Axfood AB and ALSO Holding AG in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on ALSO Holding AG 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 ALSO Holding. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of ALSO Holding AG has no effect on the direction of Axfood AB i.e., Axfood AB and ALSO Holding go up and down completely randomly.
Pair Corralation between Axfood AB and ALSO Holding
Assuming the 90 days trading horizon Axfood AB is expected to under-perform the ALSO Holding. But the stock apears to be less risky and, when comparing its historical volatility, Axfood AB is 1.18 times less risky than ALSO Holding. The stock trades about -0.01 of its potential returns per unit of risk. The ALSO Holding AG is currently generating about 0.05 of returns per unit of risk over similar time horizon. If you would invest 17,127 in ALSO Holding AG on September 2, 2024 and sell it today you would earn a total of 6,373 from holding ALSO Holding AG or generate 37.21% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Strong |
| Accuracy | 99.8% |
| Values | Daily Returns |
Axfood AB vs. ALSO Holding AG
Performance |
| Timeline |
| Axfood AB |
| ALSO Holding AG |
Axfood AB and ALSO Holding Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Axfood AB and ALSO Holding
The main advantage of trading using opposite Axfood AB and ALSO Holding positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Axfood AB position performs unexpectedly, ALSO Holding 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 ALSO Holding will offset losses from the drop in ALSO Holding's long position.| Axfood AB vs. Atalaya Mining | Axfood AB vs. Eastinco Mining Exploration | Axfood AB vs. Invesco Physical Silver | Axfood AB vs. Anglesey Mining |
| ALSO Holding vs. Telecom Italia SpA | ALSO Holding vs. Axfood AB | ALSO Holding vs. EVS Broadcast Equipment | ALSO Holding vs. Sligro Food Group |
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 Aroon Oscillator module to analyze current equity momentum using Aroon Oscillator and other momentum ratios.
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