Correlation Between Axfood AB and ZhongAn Online
Can any of the company-specific risk be diversified away by investing in both Axfood AB and ZhongAn Online 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 ZhongAn Online into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Axfood AB and ZhongAn Online P, you can compare the effects of market volatilities on Axfood AB and ZhongAn Online 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 ZhongAn Online. Check out your portfolio center. Please also check ongoing floating volatility patterns of Axfood AB and ZhongAn Online.
Diversification Opportunities for Axfood AB and ZhongAn Online
0.28 | Correlation Coefficient |
Modest diversification
The 3 months correlation between Axfood and ZhongAn is 0.28. Overlapping area represents the amount of risk that can be diversified away by holding Axfood AB and ZhongAn Online P in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on ZhongAn Online P 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 ZhongAn Online. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of ZhongAn Online P has no effect on the direction of Axfood AB i.e., Axfood AB and ZhongAn Online go up and down completely randomly.
Pair Corralation between Axfood AB and ZhongAn Online
Assuming the 90 days trading horizon Axfood AB is expected to generate 0.93 times more return on investment than ZhongAn Online. However, Axfood AB is 1.07 times less risky than ZhongAn Online. It trades about 0.08 of its potential returns per unit of risk. ZhongAn Online P is currently generating about -0.06 per unit of risk. If you would invest 1,975 in Axfood AB on October 28, 2024 and sell it today you would earn a total of 52.00 from holding Axfood AB or generate 2.63% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Axfood AB vs. ZhongAn Online P
Performance |
| Timeline |
| Axfood AB |
| ZhongAn Online P |
Axfood AB and ZhongAn Online Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Axfood AB and ZhongAn Online
The main advantage of trading using opposite Axfood AB and ZhongAn Online positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Axfood AB position performs unexpectedly, ZhongAn Online 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 ZhongAn Online will offset losses from the drop in ZhongAn Online's long position.| Axfood AB vs. FORMPIPE SOFTWARE AB | Axfood AB vs. ARISTOCRAT LEISURE | Axfood AB vs. PSI Software AG | Axfood AB vs. Luckin Coffee |
| ZhongAn Online vs. Axfood AB | ZhongAn Online vs. Treasury Wine Estates | ZhongAn Online vs. BE Semiconductor Industries | ZhongAn Online vs. Performance Food Group |
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 Aroon Oscillator module to analyze current equity momentum using Aroon Oscillator and other momentum ratios.
Other Complementary Tools
| Commodity Directory Find actively traded commodities issued by global exchanges | |
| Portfolio Comparator Compare the composition, asset allocations and performance of any two portfolios in your account | |
| Theme Ratings Determine theme ratings based on digital equity recommendations. Macroaxis theme ratings are based on combination of fundamental analysis and risk-adjusted market performance | |
| Price Transformation Use Price Transformation models to analyze the depth of different equity instruments across global markets | |
| Pair Correlation Compare performance and examine fundamental relationship between any two equity instruments |