Correlation Between Axfood AB and Sinch AB
Can any of the company-specific risk be diversified away by investing in both Axfood AB and Sinch 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 Sinch 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 Sinch AB, you can compare the effects of market volatilities on Axfood AB and Sinch 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 Sinch AB. Check out your portfolio center. Please also check ongoing floating volatility patterns of Axfood AB and Sinch AB.
Diversification Opportunities for Axfood AB and Sinch AB
Very weak diversification
The 3 months correlation between Axfood and Sinch is 0.55. Overlapping area represents the amount of risk that can be diversified away by holding Axfood AB and Sinch AB in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Sinch 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 Sinch AB. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Sinch AB has no effect on the direction of Axfood AB i.e., Axfood AB and Sinch AB go up and down completely randomly.
Pair Corralation between Axfood AB and Sinch AB
Assuming the 90 days trading horizon Axfood AB is expected to under-perform the Sinch AB. But the stock apears to be less risky and, when comparing its historical volatility, Axfood AB is 2.45 times less risky than Sinch AB. The stock trades about -0.07 of its potential returns per unit of risk. The Sinch AB is currently generating about -0.01 of returns per unit of risk over similar time horizon. If you would invest 2,396 in Sinch AB on August 28, 2024 and sell it today you would lose (357.00) from holding Sinch AB or give up 14.9% 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. Sinch AB
Performance |
| Timeline |
| Axfood AB |
| Sinch AB |
Axfood AB and Sinch AB Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Axfood AB and Sinch AB
The main advantage of trading using opposite Axfood AB and Sinch AB positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Axfood AB position performs unexpectedly, Sinch 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 Sinch AB will offset losses from the drop in Sinch 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 |
| Sinch AB vs. Lidds AB | Sinch AB vs. Serstech AB | Sinch AB vs. Transtema Group AB | Sinch AB vs. Enorama Pharma 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 Equity Analysis module to research over 250,000 global equities including funds, stocks and ETFs to find investment opportunities.
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