Correlation Between Axfood AB and Loblaw Companies
Can any of the company-specific risk be diversified away by investing in both Axfood AB and Loblaw Companies 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 Loblaw Companies into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Axfood AB and Loblaw Companies Limited, you can compare the effects of market volatilities on Axfood AB and Loblaw Companies 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 Loblaw Companies. Check out your portfolio center. Please also check ongoing floating volatility patterns of Axfood AB and Loblaw Companies.
Diversification Opportunities for Axfood AB and Loblaw Companies
0.0 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between Axfood and Loblaw is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding Axfood AB and Loblaw Companies Limited in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Loblaw Companies 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 Loblaw Companies. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Loblaw Companies has no effect on the direction of Axfood AB i.e., Axfood AB and Loblaw Companies go up and down completely randomly.
Pair Corralation between Axfood AB and Loblaw Companies
If you would invest 12,654 in Loblaw Companies Limited on September 1, 2024 and sell it today you would earn a total of 215.00 from holding Loblaw Companies Limited or generate 1.7% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Flat |
| Strength | Insignificant |
| Accuracy | 4.76% |
| Values | Daily Returns |
Axfood AB vs. Loblaw Companies Limited
Performance |
| Timeline |
| Axfood AB |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
| Loblaw Companies |
Axfood AB and Loblaw Companies Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Axfood AB and Loblaw Companies
The main advantage of trading using opposite Axfood AB and Loblaw Companies positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Axfood AB position performs unexpectedly, Loblaw Companies 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 Loblaw Companies will offset losses from the drop in Loblaw Companies' long position.| Axfood AB vs. Loblaw Companies Limited | Axfood AB vs. Sprouts Farmers Market | Axfood AB vs. Kroger Company | Axfood AB vs. Village Super Market |
| Loblaw Companies vs. Sprouts Farmers Market | Loblaw Companies vs. Kroger Company | Loblaw Companies vs. Village Super Market | Loblaw Companies vs. Weis Markets |
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 Investing Opportunities module to build portfolios using our predefined set of ideas and optimize them against your investing preferences.
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