Correlation Between Axfood AB and Jerónimo Martins
Can any of the company-specific risk be diversified away by investing in both Axfood AB and Jerónimo Martins 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 Jerónimo Martins into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Axfood AB and Jernimo Martins SGPS, you can compare the effects of market volatilities on Axfood AB and Jerónimo Martins 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 Jerónimo Martins. Check out your portfolio center. Please also check ongoing floating volatility patterns of Axfood AB and Jerónimo Martins.
Diversification Opportunities for Axfood AB and Jerónimo Martins
0.35 | Correlation Coefficient |
Weak diversification
The 3 months correlation between Axfood and Jerónimo is 0.35. Overlapping area represents the amount of risk that can be diversified away by holding Axfood AB and Jernimo Martins SGPS in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Jernimo Martins SGPS 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 Jerónimo Martins. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Jernimo Martins SGPS has no effect on the direction of Axfood AB i.e., Axfood AB and Jerónimo Martins go up and down completely randomly.
Pair Corralation between Axfood AB and Jerónimo Martins
Assuming the 90 days trading horizon Axfood AB is expected to generate 13.73 times less return on investment than Jerónimo Martins. In addition to that, Axfood AB is 1.04 times more volatile than Jernimo Martins SGPS. It trades about 0.01 of its total potential returns per unit of risk. Jernimo Martins SGPS is currently generating about 0.13 per unit of volatility. If you would invest 1,848 in Jernimo Martins SGPS on November 8, 2024 and sell it today you would earn a total of 86.00 from holding Jernimo Martins SGPS or generate 4.65% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 95.65% |
| Values | Daily Returns |
Axfood AB vs. Jernimo Martins SGPS
Performance |
| Timeline |
| Axfood AB |
| Jernimo Martins SGPS |
Axfood AB and Jerónimo Martins Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Axfood AB and Jerónimo Martins
The main advantage of trading using opposite Axfood AB and Jerónimo Martins positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Axfood AB position performs unexpectedly, Jerónimo Martins 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 Jerónimo Martins will offset losses from the drop in Jerónimo Martins' long position.| Axfood AB vs. Apollo Investment Corp | Axfood AB vs. CHRYSALIS INVESTMENTS LTD | Axfood AB vs. Gladstone Investment | Axfood AB vs. SLR Investment Corp |
| Jerónimo Martins vs. Nanjing Panda Electronics | Jerónimo Martins vs. KIMBALL ELECTRONICS | Jerónimo Martins vs. Meiko Electronics Co | Jerónimo Martins vs. Tsingtao Brewery |
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 Watchlist Optimization module to optimize watchlists to build efficient portfolios or rebalance existing positions based on the mean-variance optimization algorithm.
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