Correlation Between Axfood AB and Thule Group
Can any of the company-specific risk be diversified away by investing in both Axfood AB and Thule Group 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 Thule Group into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Axfood AB and Thule Group AB, you can compare the effects of market volatilities on Axfood AB and Thule Group 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 Thule Group. Check out your portfolio center. Please also check ongoing floating volatility patterns of Axfood AB and Thule Group.
Diversification Opportunities for Axfood AB and Thule Group
-0.91 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between Axfood and Thule is -0.91. Overlapping area represents the amount of risk that can be diversified away by holding Axfood AB and Thule Group AB in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Thule Group 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 Thule Group. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Thule Group AB has no effect on the direction of Axfood AB i.e., Axfood AB and Thule Group go up and down completely randomly.
Pair Corralation between Axfood AB and Thule Group
Assuming the 90 days trading horizon Axfood AB is expected to generate 0.63 times more return on investment than Thule Group. However, Axfood AB is 1.58 times less risky than Thule Group. It trades about -0.02 of its potential returns per unit of risk. Thule Group AB is currently generating about -0.26 per unit of risk. If you would invest 23,690 in Axfood AB on October 7, 2024 and sell it today you would lose (70.00) from holding Axfood AB or give up 0.3% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Axfood AB vs. Thule Group AB
Performance |
| Timeline |
| Axfood AB |
| Thule Group AB |
Axfood AB and Thule Group Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Axfood AB and Thule Group
The main advantage of trading using opposite Axfood AB and Thule Group positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Axfood AB position performs unexpectedly, Thule Group 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 Thule Group will offset losses from the drop in Thule Group'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 |
| Thule Group vs. MIPS AB | Thule Group vs. NIBE Industrier AB | Thule Group vs. Dometic Group AB | Thule Group vs. Husqvarna 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 Fundamentals Comparison module to compare fundamentals across multiple equities to find investing opportunities.
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