Correlation Between Axfood AB and Inwido AB
Can any of the company-specific risk be diversified away by investing in both Axfood AB and Inwido 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 Axfood AB and Inwido AB into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Axfood AB and Inwido AB, you can compare the effects of market volatilities on Axfood AB and Inwido 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 Axfood AB with a short position of Inwido AB. Check out your portfolio center. Please also check ongoing floating volatility patterns of Axfood AB and Inwido AB.
Diversification Opportunities for Axfood AB and Inwido AB
Very good diversification
The 3 months correlation between Axfood and Inwido is -0.46. Overlapping area represents the amount of risk that can be diversified away by holding Axfood AB and Inwido AB in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Inwido 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 Inwido AB. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Inwido AB has no effect on the direction of Axfood AB i.e., Axfood AB and Inwido AB go up and down completely randomly.
Pair Corralation between Axfood AB and Inwido AB
Assuming the 90 days trading horizon Axfood AB is expected to under-perform the Inwido AB. But the stock apears to be less risky and, when comparing its historical volatility, Axfood AB is 1.66 times less risky than Inwido AB. The stock trades about -0.12 of its potential returns per unit of risk. The Inwido AB is currently generating about 0.0 of returns per unit of risk over similar time horizon. If you would invest 19,650 in Inwido AB on September 12, 2024 and sell it today you would lose (40.00) from holding Inwido AB or give up 0.2% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Axfood AB vs. Inwido AB
Performance |
| Timeline |
| Axfood AB |
| Inwido AB |
Axfood AB and Inwido AB Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Axfood AB and Inwido AB
The main advantage of trading using opposite Axfood AB and Inwido AB positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Axfood AB position performs unexpectedly, Inwido 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 Inwido AB will offset losses from the drop in Inwido AB'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 |
| Inwido AB vs. Skandinaviska Enskilda Banken | Inwido AB vs. Skandinaviska Enskilda Banken | Inwido AB vs. Swedbank AB | Inwido AB vs. Svenska Handelsbanken 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 Idea Optimizer module to use advanced portfolio builder with pre-computed micro ideas to build optimal portfolio .
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