Correlation Between Axfood AB and JLEN Environmental
Can any of the company-specific risk be diversified away by investing in both Axfood AB and JLEN Environmental 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 JLEN Environmental into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Axfood AB and JLEN Environmental Assets, you can compare the effects of market volatilities on Axfood AB and JLEN Environmental 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 JLEN Environmental. Check out your portfolio center. Please also check ongoing floating volatility patterns of Axfood AB and JLEN Environmental.
Diversification Opportunities for Axfood AB and JLEN Environmental
0.18 | Correlation Coefficient |
Average diversification
The 3 months correlation between Axfood and JLEN is 0.18. Overlapping area represents the amount of risk that can be diversified away by holding Axfood AB and JLEN Environmental Assets in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on JLEN Environmental Assets 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 JLEN Environmental. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of JLEN Environmental Assets has no effect on the direction of Axfood AB i.e., Axfood AB and JLEN Environmental go up and down completely randomly.
Pair Corralation between Axfood AB and JLEN Environmental
Assuming the 90 days trading horizon Axfood AB is expected to generate 0.71 times more return on investment than JLEN Environmental. However, Axfood AB is 1.42 times less risky than JLEN Environmental. It trades about 0.03 of its potential returns per unit of risk. JLEN Environmental Assets is currently generating about -0.31 per unit of risk. If you would invest 23,475 in Axfood AB on November 8, 2024 and sell it today you would earn a total of 135.00 from holding Axfood AB or generate 0.58% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 91.3% |
| Values | Daily Returns |
Axfood AB vs. JLEN Environmental Assets
Performance |
| Timeline |
| Axfood AB |
| JLEN Environmental Assets |
Axfood AB and JLEN Environmental Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Axfood AB and JLEN Environmental
The main advantage of trading using opposite Axfood AB and JLEN Environmental positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Axfood AB position performs unexpectedly, JLEN Environmental 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 JLEN Environmental will offset losses from the drop in JLEN Environmental's long position.| Axfood AB vs. Rheinmetall AG | Axfood AB vs. Coeur Mining | Axfood AB vs. Metals Exploration Plc | Axfood AB vs. Chrysalis Investments |
| JLEN Environmental vs. Sartorius Stedim Biotech | JLEN Environmental vs. Atalaya Mining | JLEN Environmental vs. Molson Coors Beverage | JLEN Environmental vs. Heavitree Brewery |
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 Analyst Advice module to analyst recommendations and target price estimates broken down by several categories.
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