Correlation Between Axfood AB and Clas Ohlson
Can any of the company-specific risk be diversified away by investing in both Axfood AB and Clas Ohlson 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 Clas Ohlson into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Axfood AB and Clas Ohlson AB, you can compare the effects of market volatilities on Axfood AB and Clas Ohlson 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 Clas Ohlson. Check out your portfolio center. Please also check ongoing floating volatility patterns of Axfood AB and Clas Ohlson.
Diversification Opportunities for Axfood AB and Clas Ohlson
-0.79 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between Axfood and Clas is -0.79. Overlapping area represents the amount of risk that can be diversified away by holding Axfood AB and Clas Ohlson AB in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Clas Ohlson 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 Clas Ohlson. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Clas Ohlson AB has no effect on the direction of Axfood AB i.e., Axfood AB and Clas Ohlson go up and down completely randomly.
Pair Corralation between Axfood AB and Clas Ohlson
Assuming the 90 days trading horizon Axfood AB is expected to under-perform the Clas Ohlson. But the stock apears to be less risky and, when comparing its historical volatility, Axfood AB is 1.05 times less risky than Clas Ohlson. The stock trades about -0.07 of its potential returns per unit of risk. The Clas Ohlson AB is currently generating about 0.33 of returns per unit of risk over similar time horizon. If you would invest 17,120 in Clas Ohlson AB on August 25, 2024 and sell it today you would earn a total of 2,040 from holding Clas Ohlson AB or generate 11.92% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Axfood AB vs. Clas Ohlson AB
Performance |
| Timeline |
| Axfood AB |
| Clas Ohlson AB |
Axfood AB and Clas Ohlson Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Axfood AB and Clas Ohlson
The main advantage of trading using opposite Axfood AB and Clas Ohlson positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Axfood AB position performs unexpectedly, Clas Ohlson 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 Clas Ohlson will offset losses from the drop in Clas Ohlson'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 |
| Clas Ohlson vs. Tele2 AB | Clas Ohlson vs. Axfood AB | Clas Ohlson vs. Telia Company AB | Clas Ohlson vs. Byggmax Group 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 Performance Analysis module to check effects of mean-variance optimization against your current asset allocation.
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