Correlation Between Ecclesiastical Insurance and Axfood AB
Can any of the company-specific risk be diversified away by investing in both Ecclesiastical Insurance 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 Ecclesiastical Insurance and Axfood AB into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Ecclesiastical Insurance Office and Axfood AB, you can compare the effects of market volatilities on Ecclesiastical Insurance 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 Ecclesiastical Insurance with a short position of Axfood AB. Check out your portfolio center. Please also check ongoing floating volatility patterns of Ecclesiastical Insurance and Axfood AB.
Diversification Opportunities for Ecclesiastical Insurance and Axfood AB
0.22 | Correlation Coefficient |
Modest diversification
The 3 months correlation between Ecclesiastical and Axfood is 0.22. Overlapping area represents the amount of risk that can be diversified away by holding Ecclesiastical Insurance Offic and Axfood AB in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Axfood AB and Ecclesiastical Insurance 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 Ecclesiastical Insurance Office 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 Ecclesiastical Insurance i.e., Ecclesiastical Insurance and Axfood AB go up and down completely randomly.
Pair Corralation between Ecclesiastical Insurance and Axfood AB
Assuming the 90 days trading horizon Ecclesiastical Insurance Office is expected to generate 0.63 times more return on investment than Axfood AB. However, Ecclesiastical Insurance Office is 1.58 times less risky than Axfood AB. It trades about 0.04 of its potential returns per unit of risk. Axfood AB is currently generating about 0.01 per unit of risk. If you would invest 11,728 in Ecclesiastical Insurance Office on September 2, 2024 and sell it today you would earn a total of 1,672 from holding Ecclesiastical Insurance Office or generate 14.26% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 99.74% |
| Values | Daily Returns |
Ecclesiastical Insurance Offic vs. Axfood AB
Performance |
| Timeline |
| Ecclesiastical Insurance |
| Axfood AB |
Ecclesiastical Insurance and Axfood AB Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Ecclesiastical Insurance and Axfood AB
The main advantage of trading using opposite Ecclesiastical Insurance and Axfood AB positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Ecclesiastical Insurance 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.| Ecclesiastical Insurance vs. Toyota Motor Corp | Ecclesiastical Insurance vs. SoftBank Group Corp | Ecclesiastical Insurance vs. Fannie Mae | Ecclesiastical Insurance vs. Apple Inc |
| Axfood AB vs. Atalaya Mining | Axfood AB vs. Eastinco Mining Exploration | Axfood AB vs. Invesco Physical Silver | Axfood AB vs. Anglesey 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 Portfolio Manager module to state of the art Portfolio Manager to monitor and improve performance of your invested capital.
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