Correlation Between Hong Kong and Axfood AB
Can any of the company-specific risk be diversified away by investing in both Hong Kong 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 Hong Kong and Axfood AB into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Hong Kong Land and Axfood AB, you can compare the effects of market volatilities on Hong Kong 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 Hong Kong with a short position of Axfood AB. Check out your portfolio center. Please also check ongoing floating volatility patterns of Hong Kong and Axfood AB.
Diversification Opportunities for Hong Kong and Axfood AB
Pay attention - limited upside
The 3 months correlation between Hong and Axfood is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding Hong Kong Land and Axfood AB in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Axfood AB and Hong Kong 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 Hong Kong Land 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 Hong Kong i.e., Hong Kong and Axfood AB go up and down completely randomly.
Pair Corralation between Hong Kong and Axfood AB
Assuming the 90 days trading horizon Hong Kong Land is expected to generate 0.1 times more return on investment than Axfood AB. However, Hong Kong Land is 9.59 times less risky than Axfood AB. It trades about 0.08 of its potential returns per unit of risk. Axfood AB is currently generating about -0.01 per unit of risk. If you would invest 698.00 in Hong Kong Land on September 12, 2024 and sell it today you would earn a total of 43.00 from holding Hong Kong Land or generate 6.16% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Flat |
| Strength | Insignificant |
| Accuracy | 99.6% |
| Values | Daily Returns |
Hong Kong Land vs. Axfood AB
Performance |
| Timeline |
| Hong Kong Land |
| Axfood AB |
Hong Kong and Axfood AB Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Hong Kong and Axfood AB
The main advantage of trading using opposite Hong Kong and Axfood AB positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Hong Kong 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.| Hong Kong vs. Wheaton Precious Metals | Hong Kong vs. Universal Display Corp | Hong Kong vs. Zoom Video Communications | Hong Kong vs. Cornish Metals |
| Axfood AB vs. Hong Kong Land | Axfood AB vs. Neometals | Axfood AB vs. Coor Service Management | Axfood AB vs. Fidelity Sustainable USD |
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 Equity Forecasting module to use basic forecasting models to generate price predictions and determine price momentum.
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