Correlation Between Axfood AB and Neola Medical
Can any of the company-specific risk be diversified away by investing in both Axfood AB and Neola Medical 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 Neola Medical into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Axfood AB and Neola Medical AB, you can compare the effects of market volatilities on Axfood AB and Neola Medical 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 Neola Medical. Check out your portfolio center. Please also check ongoing floating volatility patterns of Axfood AB and Neola Medical.
Diversification Opportunities for Axfood AB and Neola Medical
-0.02 | Correlation Coefficient |
Good diversification
The 3 months correlation between Axfood and Neola is -0.02. Overlapping area represents the amount of risk that can be diversified away by holding Axfood AB and Neola Medical AB in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Neola Medical 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 Neola Medical. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Neola Medical AB has no effect on the direction of Axfood AB i.e., Axfood AB and Neola Medical go up and down completely randomly.
Pair Corralation between Axfood AB and Neola Medical
Assuming the 90 days trading horizon Axfood AB is expected to generate 22.01 times less return on investment than Neola Medical. But when comparing it to its historical volatility, Axfood AB is 3.6 times less risky than Neola Medical. It trades about 0.01 of its potential returns per unit of risk. Neola Medical AB is currently generating about 0.03 of returns per unit of risk over similar time horizon. If you would invest 191.00 in Neola Medical AB on November 27, 2024 and sell it today you would earn a total of 45.00 from holding Neola Medical AB or generate 23.56% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Axfood AB vs. Neola Medical AB
Performance |
| Timeline |
| Axfood AB |
| Neola Medical AB |
Axfood AB and Neola Medical Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Axfood AB and Neola Medical
The main advantage of trading using opposite Axfood AB and Neola Medical positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Axfood AB position performs unexpectedly, Neola Medical 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 Neola Medical will offset losses from the drop in Neola Medical'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 |
| Neola Medical vs. FormPipe Software AB | Neola Medical vs. Redsense Medical AB | Neola Medical vs. Nordic Iron Ore | Neola Medical 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 Idea Breakdown module to analyze constituents of all Macroaxis ideas. Macroaxis investment ideas are predefined, sector-focused investing themes.
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