Correlation Between Axfood AB and Delta Air
Can any of the company-specific risk be diversified away by investing in both Axfood AB and Delta Air 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 Delta Air into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Axfood AB and Delta Air Lines, you can compare the effects of market volatilities on Axfood AB and Delta Air 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 Delta Air. Check out your portfolio center. Please also check ongoing floating volatility patterns of Axfood AB and Delta Air.
Diversification Opportunities for Axfood AB and Delta Air
Pay attention - limited upside
The 3 months correlation between Axfood and Delta is -0.8. Overlapping area represents the amount of risk that can be diversified away by holding Axfood AB and Delta Air Lines in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Delta Air Lines 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 Delta Air. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Delta Air Lines has no effect on the direction of Axfood AB i.e., Axfood AB and Delta Air go up and down completely randomly.
Pair Corralation between Axfood AB and Delta Air
Assuming the 90 days trading horizon Axfood AB is expected to under-perform the Delta Air. But the stock apears to be less risky and, when comparing its historical volatility, Axfood AB is 1.99 times less risky than Delta Air. The stock trades about -0.01 of its potential returns per unit of risk. The Delta Air Lines is currently generating about 0.24 of returns per unit of risk over similar time horizon. If you would invest 5,716 in Delta Air Lines on September 1, 2024 and sell it today you would earn a total of 659.00 from holding Delta Air Lines or generate 11.53% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Axfood AB vs. Delta Air Lines
Performance |
| Timeline |
| Axfood AB |
| Delta Air Lines |
Axfood AB and Delta Air Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Axfood AB and Delta Air
The main advantage of trading using opposite Axfood AB and Delta Air positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Axfood AB position performs unexpectedly, Delta Air 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 Delta Air will offset losses from the drop in Delta Air's long position.| Axfood AB vs. Infrastrutture Wireless Italiane | Axfood AB vs. Nordic Semiconductor ASA | Axfood AB vs. Zoom Video Communications | Axfood AB vs. MTI Wireless Edge |
| Delta Air vs. Induction Healthcare Group | Delta Air vs. CVS Health Corp | Delta Air vs. Federal Realty Investment | Delta Air vs. Optima Health plc |
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 Forecasting module to use basic forecasting models to generate price predictions and determine price momentum.
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