Correlation Between Axfood AB and Media
Can any of the company-specific risk be diversified away by investing in both Axfood AB and Media 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 Media into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Axfood AB and Media and Games, you can compare the effects of market volatilities on Axfood AB and Media 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 Media. Check out your portfolio center. Please also check ongoing floating volatility patterns of Axfood AB and Media.
Diversification Opportunities for Axfood AB and Media
Pay attention - limited upside
The 3 months correlation between Axfood and Media is -0.76. Overlapping area represents the amount of risk that can be diversified away by holding Axfood AB and Media and Games in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Media and Games 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 Media. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Media and Games has no effect on the direction of Axfood AB i.e., Axfood AB and Media go up and down completely randomly.
Pair Corralation between Axfood AB and Media
Assuming the 90 days trading horizon Axfood AB is expected to under-perform the Media. But the stock apears to be less risky and, when comparing its historical volatility, Axfood AB is 2.98 times less risky than Media. The stock trades about -0.02 of its potential returns per unit of risk. The Media and Games is currently generating about 0.13 of returns per unit of risk over similar time horizon. If you would invest 1,192 in Media and Games on September 14, 2024 and sell it today you would earn a total of 2,703 from holding Media and Games or generate 226.76% 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. Media and Games
Performance |
| Timeline |
| Axfood AB |
| Media and Games |
Axfood AB and Media Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Axfood AB and Media
The main advantage of trading using opposite Axfood AB and Media positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Axfood AB position performs unexpectedly, Media 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 Media will offset losses from the drop in Media'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 |
| Media vs. Embracer Group AB | Media vs. Samhllsbyggnadsbolaget i Norden | Media vs. Sinch AB | Media vs. Zaptec AS |
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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