Correlation Between Investor and Axfood AB
Can any of the company-specific risk be diversified away by investing in both Investor 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 Investor and Axfood AB into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Investor AB ser and Axfood AB, you can compare the effects of market volatilities on Investor 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 Investor with a short position of Axfood AB. Check out your portfolio center. Please also check ongoing floating volatility patterns of Investor and Axfood AB.
Diversification Opportunities for Investor and Axfood AB
Very weak diversification
The 3 months correlation between Investor and Axfood is 0.51. Overlapping area represents the amount of risk that can be diversified away by holding Investor AB ser and Axfood AB in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Axfood AB and Investor 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 Investor AB ser 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 Investor i.e., Investor and Axfood AB go up and down completely randomly.
Pair Corralation between Investor and Axfood AB
Assuming the 90 days trading horizon Investor AB ser is expected to generate 0.52 times more return on investment than Axfood AB. However, Investor AB ser is 1.92 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 -0.1 per unit of risk. If you would invest 30,530 in Investor AB ser on August 29, 2024 and sell it today you would lose (865.00) from holding Investor AB ser or give up 2.83% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Investor AB ser vs. Axfood AB
Performance |
| Timeline |
| Investor AB ser |
| Axfood AB |
Investor and Axfood AB Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Investor and Axfood AB
The main advantage of trading using opposite Investor and Axfood AB positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Investor 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.| Investor vs. Kinnevik Investment AB | Investor vs. Investment AB Latour | Investor vs. Samhllsbyggnadsbolaget i Norden | Investor vs. Industrivarden AB ser |
| Axfood AB vs. Castellum AB | Axfood AB vs. Tele2 AB | Axfood AB vs. Investor AB ser | Axfood AB vs. Kinnevik Investment AB |
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 Sign In To Macroaxis module to sign in to explore Macroaxis' wealth optimization platform and fintech modules.
Other Complementary Tools
| Theme Ratings Determine theme ratings based on digital equity recommendations. Macroaxis theme ratings are based on combination of fundamental analysis and risk-adjusted market performance | |
| Global Correlations Find global opportunities by holding instruments from different markets | |
| Equity Analysis Research over 250,000 global equities including funds, stocks and ETFs to find investment opportunities | |
| Premium Stories Follow Macroaxis premium stories from verified contributors across different equity types, categories and coverage scope | |
| Risk-Return Analysis View associations between returns expected from investment and the risk you assume |