Correlation Between Hilton Food and Axfood AB
Can any of the company-specific risk be diversified away by investing in both Hilton 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 Hilton 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 Hilton Food Group and Axfood AB, you can compare the effects of market volatilities on Hilton 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 Hilton Food with a short position of Axfood AB. Check out your portfolio center. Please also check ongoing floating volatility patterns of Hilton Food and Axfood AB.
Diversification Opportunities for Hilton Food and Axfood AB
-0.52 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Hilton and Axfood is -0.52. Overlapping area represents the amount of risk that can be diversified away by holding Hilton Food Group and Axfood AB in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Axfood AB and Hilton 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 Hilton Food Group 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 Hilton Food i.e., Hilton Food and Axfood AB go up and down completely randomly.
Pair Corralation between Hilton Food and Axfood AB
Assuming the 90 days trading horizon Hilton Food Group is expected to generate 1.23 times more return on investment than Axfood AB. However, Hilton Food is 1.23 times more volatile than Axfood AB. It trades about 0.03 of its potential returns per unit of risk. Axfood AB is currently generating about 0.02 per unit of risk. If you would invest 90,440 in Hilton Food Group on August 31, 2024 and sell it today you would earn a total of 760.00 from holding Hilton Food Group or generate 0.84% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Hilton Food Group vs. Axfood AB
Performance |
| Timeline |
| Hilton Food Group |
| Axfood AB |
Hilton Food and Axfood AB Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Hilton Food and Axfood AB
The main advantage of trading using opposite Hilton Food and Axfood AB positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Hilton 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.| Hilton Food vs. Impax Environmental Markets | Hilton Food vs. Veolia Environnement VE | Hilton Food vs. United States Steel | Hilton Food vs. Ecclesiastical Insurance Office |
| Axfood AB vs. Take Two Interactive Software | Axfood AB vs. Melia Hotels | Axfood AB vs. Microchip Technology | Axfood AB vs. Compagnie Plastic Omnium |
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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