Correlation Between Axfood AB and United Natural
Can any of the company-specific risk be diversified away by investing in both Axfood AB and United Natural 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 United Natural into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Axfood AB and United Natural Foods, you can compare the effects of market volatilities on Axfood AB and United Natural 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 United Natural. Check out your portfolio center. Please also check ongoing floating volatility patterns of Axfood AB and United Natural.
Diversification Opportunities for Axfood AB and United Natural
0.0 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between Axfood and United is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding Axfood AB and United Natural Foods in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on United Natural Foods 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 United Natural. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of United Natural Foods has no effect on the direction of Axfood AB i.e., Axfood AB and United Natural go up and down completely randomly.
Pair Corralation between Axfood AB and United Natural
Assuming the 90 days trading horizon Axfood AB is expected to under-perform the United Natural. But the stock apears to be less risky and, when comparing its historical volatility, Axfood AB is 1.53 times less risky than United Natural. The stock trades about -0.04 of its potential returns per unit of risk. The United Natural Foods is currently generating about 0.33 of returns per unit of risk over similar time horizon. If you would invest 1,893 in United Natural Foods on August 30, 2024 and sell it today you would earn a total of 405.00 from holding United Natural Foods or generate 21.39% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Flat |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Axfood AB vs. United Natural Foods
Performance |
| Timeline |
| Axfood AB |
| United Natural Foods |
Axfood AB and United Natural Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Axfood AB and United Natural
The main advantage of trading using opposite Axfood AB and United Natural positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Axfood AB position performs unexpectedly, United Natural 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 United Natural will offset losses from the drop in United Natural's long position.| Axfood AB vs. New Residential Investment | Axfood AB vs. Gol Intelligent Airlines | Axfood AB vs. HK Electric Investments | Axfood AB vs. SINGAPORE AIRLINES |
| United Natural vs. Constellation Software | United Natural vs. GEAR4MUSIC LS 10 | United Natural vs. UPDATE SOFTWARE | United Natural vs. Take Two Interactive Software |
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 Idea Breakdown module to analyze constituents of all Macroaxis ideas. Macroaxis investment ideas are predefined, sector-focused investing themes.
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