Correlation Between Axfood AB and SBB-B
Can any of the company-specific risk be diversified away by investing in both Axfood AB and SBB-B 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 SBB-B into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Axfood AB and Samhllsbyggnadsbolaget i Norden, you can compare the effects of market volatilities on Axfood AB and SBB-B 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 SBB-B. Check out your portfolio center. Please also check ongoing floating volatility patterns of Axfood AB and SBB-B.
Diversification Opportunities for Axfood AB and SBB-B
Almost no diversification
The 3 months correlation between Axfood and SBB-B is 0.9. Overlapping area represents the amount of risk that can be diversified away by holding Axfood AB and Samhllsbyggnadsbolaget i Norde in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Samhllsbyggnadsbolaget 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 SBB-B. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Samhllsbyggnadsbolaget has no effect on the direction of Axfood AB i.e., Axfood AB and SBB-B go up and down completely randomly.
Pair Corralation between Axfood AB and SBB-B
Assuming the 90 days trading horizon Axfood AB is expected to generate 0.24 times more return on investment than SBB-B. However, Axfood AB is 4.23 times less risky than SBB-B. It trades about 0.05 of its potential returns per unit of risk. Samhllsbyggnadsbolaget i Norden is currently generating about -0.23 per unit of risk. If you would invest 23,310 in Axfood AB on August 31, 2024 and sell it today you would earn a total of 320.00 from holding Axfood AB or generate 1.37% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Axfood AB vs. Samhllsbyggnadsbolaget i Norde
Performance |
| Timeline |
| Axfood AB |
| Samhllsbyggnadsbolaget |
Axfood AB and SBB-B Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Axfood AB and SBB-B
The main advantage of trading using opposite Axfood AB and SBB-B positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Axfood AB position performs unexpectedly, SBB-B 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 SBB-B will offset losses from the drop in SBB-B'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 |
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 Commodity Directory module to find actively traded commodities issued by global exchanges.
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