Correlation Between Axfood AB and Maven Wireless
Can any of the company-specific risk be diversified away by investing in both Axfood AB and Maven Wireless 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 Maven Wireless into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Axfood AB and Maven Wireless Sweden, you can compare the effects of market volatilities on Axfood AB and Maven Wireless 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 Maven Wireless. Check out your portfolio center. Please also check ongoing floating volatility patterns of Axfood AB and Maven Wireless.
Diversification Opportunities for Axfood AB and Maven Wireless
0.52 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Axfood and Maven is 0.52. Overlapping area represents the amount of risk that can be diversified away by holding Axfood AB and Maven Wireless Sweden in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Maven Wireless Sweden 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 Maven Wireless. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Maven Wireless Sweden has no effect on the direction of Axfood AB i.e., Axfood AB and Maven Wireless go up and down completely randomly.
Pair Corralation between Axfood AB and Maven Wireless
Assuming the 90 days trading horizon Axfood AB is expected to generate 0.41 times more return on investment than Maven Wireless. However, Axfood AB is 2.45 times less risky than Maven Wireless. It trades about -0.11 of its potential returns per unit of risk. Maven Wireless Sweden is currently generating about -0.25 per unit of risk. If you would invest 24,040 in Axfood AB on September 3, 2024 and sell it today you would lose (670.00) from holding Axfood AB or give up 2.79% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Axfood AB vs. Maven Wireless Sweden
Performance |
| Timeline |
| Axfood AB |
| Maven Wireless Sweden |
Axfood AB and Maven Wireless Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Axfood AB and Maven Wireless
The main advantage of trading using opposite Axfood AB and Maven Wireless positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Axfood AB position performs unexpectedly, Maven Wireless 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 Maven Wireless will offset losses from the drop in Maven Wireless' long position.| Axfood AB vs. Castellum AB | Axfood AB vs. Tele2 AB | Axfood AB vs. Investor AB ser | Axfood AB vs. Kinnevik Investment AB |
| Maven Wireless vs. Embracer Group AB | Maven Wireless vs. Samhllsbyggnadsbolaget i Norden | Maven Wireless vs. Evolution AB | Maven Wireless vs. Stillfront 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 Stocks Directory module to find actively traded stocks across global markets.
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