Correlation Between Uniper SE and Axfood AB
Can any of the company-specific risk be diversified away by investing in both Uniper SE and Axfood AB 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 Uniper SE and Axfood AB into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Uniper SE and Axfood AB, you can compare the effects of market volatilities on Uniper SE and Axfood AB 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 Uniper SE with a short position of Axfood AB. Check out your portfolio center. Please also check ongoing floating volatility patterns of Uniper SE and Axfood AB.
Diversification Opportunities for Uniper SE and Axfood AB
Very poor diversification
The 3 months correlation between Uniper and Axfood is 0.82. Overlapping area represents the amount of risk that can be diversified away by holding Uniper SE and Axfood AB in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Axfood AB and Uniper SE 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 Uniper SE are associated (or correlated) with Axfood AB. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Axfood AB has no effect on the direction of Uniper SE i.e., Uniper SE and Axfood AB go up and down completely randomly.
Pair Corralation between Uniper SE and Axfood AB
Assuming the 90 days trading horizon Uniper SE is expected to under-perform the Axfood AB. In addition to that, Uniper SE is 3.11 times more volatile than Axfood AB. It trades about -0.14 of its total potential returns per unit of risk. Axfood AB is currently generating about -0.14 per unit of volatility. If you would invest 23,630 in Axfood AB on September 28, 2024 and sell it today you would lose (485.00) from holding Axfood AB or give up 2.05% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Uniper SE vs. Axfood AB
Performance |
| Timeline |
| Uniper SE |
| Axfood AB |
Uniper SE and Axfood AB Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Uniper SE and Axfood AB
The main advantage of trading using opposite Uniper SE and Axfood AB positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Uniper SE position performs unexpectedly, Axfood AB 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 Axfood AB will offset losses from the drop in Axfood AB's long position.| Uniper SE vs. Mulberry Group PLC | Uniper SE vs. London Security Plc | Uniper SE vs. Triad Group PLC | Uniper SE vs. SURETRACK MON |
| Axfood AB vs. Uniper SE | Axfood AB vs. Mulberry Group PLC | Axfood AB vs. London Security Plc | Axfood AB vs. Triad Group 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 Top Crypto Exchanges module to search and analyze digital assets across top global cryptocurrency exchanges.
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