Correlation Between Axfood AB and Husqvarna
Can any of the company-specific risk be diversified away by investing in both Axfood AB and Husqvarna 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 Husqvarna into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Axfood AB and Husqvarna AB, you can compare the effects of market volatilities on Axfood AB and Husqvarna 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 Husqvarna. Check out your portfolio center. Please also check ongoing floating volatility patterns of Axfood AB and Husqvarna.
Diversification Opportunities for Axfood AB and Husqvarna
Average diversification
The 3 months correlation between Axfood and Husqvarna is 0.18. Overlapping area represents the amount of risk that can be diversified away by holding Axfood AB and Husqvarna AB in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Husqvarna 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 Husqvarna. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Husqvarna AB has no effect on the direction of Axfood AB i.e., Axfood AB and Husqvarna go up and down completely randomly.
Pair Corralation between Axfood AB and Husqvarna
Assuming the 90 days trading horizon Axfood AB is expected to generate 0.74 times more return on investment than Husqvarna. However, Axfood AB is 1.35 times less risky than Husqvarna. It trades about -0.06 of its potential returns per unit of risk. Husqvarna AB is currently generating about -0.22 per unit of risk. If you would invest 23,790 in Axfood AB on September 1, 2024 and sell it today you would lose (420.00) from holding Axfood AB or give up 1.77% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Axfood AB vs. Husqvarna AB
Performance |
| Timeline |
| Axfood AB |
| Husqvarna AB |
Axfood AB and Husqvarna Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Axfood AB and Husqvarna
The main advantage of trading using opposite Axfood AB and Husqvarna positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Axfood AB position performs unexpectedly, Husqvarna 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 Husqvarna will offset losses from the drop in Husqvarna'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 |
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 Piotroski F Score module to get Piotroski F Score based on the binary analysis strategy of nine different fundamentals.
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