Correlation Between Axfood AB and Castellum
Can any of the company-specific risk be diversified away by investing in both Axfood AB and Castellum 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 Castellum into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Axfood AB and Castellum AB, you can compare the effects of market volatilities on Axfood AB and Castellum 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 Castellum. Check out your portfolio center. Please also check ongoing floating volatility patterns of Axfood AB and Castellum.
Diversification Opportunities for Axfood AB and Castellum
Very weak diversification
The 3 months correlation between Axfood and Castellum is 0.52. Overlapping area represents the amount of risk that can be diversified away by holding Axfood AB and Castellum AB in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Castellum AB 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 Castellum. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Castellum AB has no effect on the direction of Axfood AB i.e., Axfood AB and Castellum go up and down completely randomly.
Pair Corralation between Axfood AB and Castellum
Assuming the 90 days trading horizon Axfood AB is expected to generate 2.85 times less return on investment than Castellum. But when comparing it to its historical volatility, Axfood AB is 1.64 times less risky than Castellum. It trades about 0.01 of its potential returns per unit of risk. Castellum AB is currently generating about 0.02 of returns per unit of risk over similar time horizon. If you would invest 11,622 in Castellum AB on November 2, 2024 and sell it today you would earn a total of 648.00 from holding Castellum AB or generate 5.58% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Axfood AB vs. Castellum AB
Performance |
| Timeline |
| Axfood AB |
| Castellum AB |
Axfood AB and Castellum Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Axfood AB and Castellum
The main advantage of trading using opposite Axfood AB and Castellum positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Axfood AB position performs unexpectedly, Castellum 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 Castellum will offset losses from the drop in Castellum's long position.| Axfood AB vs. Castellum AB | Axfood AB vs. Tele2 AB | Axfood AB vs. Investor AB ser | Axfood AB vs. Kinnevik Investment AB |
| Castellum vs. Fabege AB | Castellum vs. Samhllsbyggnadsbolaget i Norden | Castellum vs. Fastighets AB Balder | Castellum vs. Axfood AB |
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 Competition Analyzer module to analyze and compare many basic indicators for a group of related or unrelated entities.
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