Correlation Between Axfood AB and Bell Food
Can any of the company-specific risk be diversified away by investing in both Axfood AB and Bell Food 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 Bell Food into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Axfood AB and Bell Food Group, you can compare the effects of market volatilities on Axfood AB and Bell Food 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 Bell Food. Check out your portfolio center. Please also check ongoing floating volatility patterns of Axfood AB and Bell Food.
Diversification Opportunities for Axfood AB and Bell Food
Average diversification
The 3 months correlation between Axfood and Bell is 0.19. Overlapping area represents the amount of risk that can be diversified away by holding Axfood AB and Bell Food Group in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Bell Food Group 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 Bell Food. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Bell Food Group has no effect on the direction of Axfood AB i.e., Axfood AB and Bell Food go up and down completely randomly.
Pair Corralation between Axfood AB and Bell Food
Assuming the 90 days trading horizon Axfood AB is expected to under-perform the Bell Food. But the stock apears to be less risky and, when comparing its historical volatility, Axfood AB is 1.32 times less risky than Bell Food. The stock trades about -0.11 of its potential returns per unit of risk. The Bell Food Group is currently generating about 0.01 of returns per unit of risk over similar time horizon. If you would invest 26,600 in Bell Food Group on September 27, 2024 and sell it today you would earn a total of 50.00 from holding Bell Food Group or generate 0.19% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 90.91% |
| Values | Daily Returns |
Axfood AB vs. Bell Food Group
Performance |
| Timeline |
| Axfood AB |
| Bell Food Group |
Axfood AB and Bell Food Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Axfood AB and Bell Food
The main advantage of trading using opposite Axfood AB and Bell Food positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Axfood AB position performs unexpectedly, Bell Food 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 Bell Food will offset losses from the drop in Bell Food's long position.| Axfood AB vs. Uniper SE | Axfood AB vs. Mulberry Group PLC | Axfood AB vs. London Security Plc | Axfood AB vs. Triad Group PLC |
| Bell Food vs. Aurora Investment Trust | Bell Food vs. Porvair plc | Bell Food vs. British American Tobacco | Bell Food vs. Taylor Maritime Investments |
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 Latest Portfolios module to quick portfolio dashboard that showcases your latest portfolios.
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