Correlation Between Axfood AB and Indutrade
Can any of the company-specific risk be diversified away by investing in both Axfood AB and Indutrade 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 Indutrade into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Axfood AB and Indutrade AB, you can compare the effects of market volatilities on Axfood AB and Indutrade 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 Indutrade. Check out your portfolio center. Please also check ongoing floating volatility patterns of Axfood AB and Indutrade.
Diversification Opportunities for Axfood AB and Indutrade
Modest diversification
The 3 months correlation between Axfood and Indutrade is 0.21. Overlapping area represents the amount of risk that can be diversified away by holding Axfood AB and Indutrade AB in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Indutrade 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 Indutrade. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Indutrade AB has no effect on the direction of Axfood AB i.e., Axfood AB and Indutrade go up and down completely randomly.
Pair Corralation between Axfood AB and Indutrade
Assuming the 90 days trading horizon Axfood AB is expected to under-perform the Indutrade. But the stock apears to be less risky and, when comparing its historical volatility, Axfood AB is 1.47 times less risky than Indutrade. The stock trades about -0.15 of its potential returns per unit of risk. The Indutrade AB is currently generating about 0.19 of returns per unit of risk over similar time horizon. If you would invest 29,820 in Indutrade AB on November 27, 2024 and sell it today you would earn a total of 1,740 from holding Indutrade AB or generate 5.84% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Axfood AB vs. Indutrade AB
Performance |
| Timeline |
| Axfood AB |
| Indutrade AB |
Axfood AB and Indutrade Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Axfood AB and Indutrade
The main advantage of trading using opposite Axfood AB and Indutrade positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Axfood AB position performs unexpectedly, Indutrade 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 Indutrade will offset losses from the drop in Indutrade'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 |
| Indutrade vs. Lifco AB | Indutrade vs. Addtech AB | Indutrade vs. NIBE Industrier AB | Indutrade vs. Investment AB Latour |
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 Equity Analysis module to research over 250,000 global equities including funds, stocks and ETFs to find investment opportunities.
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