Correlation Between Edita Food and Axfood AB
Can any of the company-specific risk be diversified away by investing in both Edita Food 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 Edita Food and Axfood AB into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Edita Food Industries and Axfood AB, you can compare the effects of market volatilities on Edita Food 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 Edita Food with a short position of Axfood AB. Check out your portfolio center. Please also check ongoing floating volatility patterns of Edita Food and Axfood AB.
Diversification Opportunities for Edita Food and Axfood AB
0.09 | Correlation Coefficient |
Significant diversification
The 3 months correlation between Edita and Axfood is 0.09. Overlapping area represents the amount of risk that can be diversified away by holding Edita Food Industries and Axfood AB in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Axfood AB and Edita Food 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 Edita Food Industries 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 Edita Food i.e., Edita Food and Axfood AB go up and down completely randomly.
Pair Corralation between Edita Food and Axfood AB
If you would invest 23,630 in Axfood AB on November 4, 2024 and sell it today you would earn a total of 255.00 from holding Axfood AB or generate 1.08% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Edita Food Industries vs. Axfood AB
Performance |
| Timeline |
| Edita Food Industries |
| Axfood AB |
Edita Food and Axfood AB Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Edita Food and Axfood AB
The main advantage of trading using opposite Edita Food and Axfood AB positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Edita Food 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.| Edita Food vs. TBC Bank Group | Edita Food vs. Bank of Ireland | Edita Food vs. Discover Financial Services | Edita Food vs. Regions Financial Corp |
| 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 Stock Tickers module to use high-impact, comprehensive, and customizable stock tickers that can be easily integrated to any websites.
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