Correlation Between Batm Advanced and Axfood AB
Can any of the company-specific risk be diversified away by investing in both Batm Advanced and Axfood AB 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 Batm Advanced and Axfood AB into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Batm Advanced Communications and Axfood AB, you can compare the effects of market volatilities on Batm Advanced and Axfood AB 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 Batm Advanced with a short position of Axfood AB. Check out your portfolio center. Please also check ongoing floating volatility patterns of Batm Advanced and Axfood AB.
Diversification Opportunities for Batm Advanced and Axfood AB
-0.08 | Correlation Coefficient |
Good diversification
The 3 months correlation between Batm and Axfood is -0.08. Overlapping area represents the amount of risk that can be diversified away by holding Batm Advanced Communications and Axfood AB in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Axfood AB and Batm Advanced 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 Batm Advanced Communications are associated (or correlated) with Axfood AB. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Axfood AB has no effect on the direction of Batm Advanced i.e., Batm Advanced and Axfood AB go up and down completely randomly.
Pair Corralation between Batm Advanced and Axfood AB
Assuming the 90 days trading horizon Batm Advanced Communications is expected to generate 1.1 times more return on investment than Axfood AB. However, Batm Advanced is 1.1 times more volatile than Axfood AB. It trades about 0.04 of its potential returns per unit of risk. Axfood AB is currently generating about 0.04 per unit of risk. If you would invest 1,838 in Batm Advanced Communications on November 4, 2024 and sell it today you would earn a total of 20.00 from holding Batm Advanced Communications or generate 1.09% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Batm Advanced Communications vs. Axfood AB
Performance |
| Timeline |
| Batm Advanced Commun |
| Axfood AB |
Batm Advanced and Axfood AB Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Batm Advanced and Axfood AB
The main advantage of trading using opposite Batm Advanced and Axfood AB positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Batm Advanced position performs unexpectedly, Axfood AB 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 Axfood AB will offset losses from the drop in Axfood AB's long position.| Batm Advanced vs. Ecclesiastical Insurance Office | Batm Advanced vs. Porvair plc | Batm Advanced vs. Finnair Oyj | Batm Advanced vs. STMicroelectronics NV |
| Axfood AB vs. Golden Metal Resources | Axfood AB vs. Host Hotels Resorts | Axfood AB vs. Endeavour Mining Corp | Axfood AB vs. Atalaya Mining |
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 Optimizer module to use advanced portfolio builder with pre-computed micro ideas to build optimal portfolio .
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