Correlation Between Mulberry Group and Axfood AB
Can any of the company-specific risk be diversified away by investing in both Mulberry Group 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 Mulberry Group and Axfood AB into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Mulberry Group PLC and Axfood AB, you can compare the effects of market volatilities on Mulberry Group 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 Mulberry Group with a short position of Axfood AB. Check out your portfolio center. Please also check ongoing floating volatility patterns of Mulberry Group and Axfood AB.
Diversification Opportunities for Mulberry Group and Axfood AB
0.74 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Mulberry and Axfood is 0.74. Overlapping area represents the amount of risk that can be diversified away by holding Mulberry Group PLC and Axfood AB in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Axfood AB and Mulberry Group 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 Mulberry Group PLC 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 Mulberry Group i.e., Mulberry Group and Axfood AB go up and down completely randomly.
Pair Corralation between Mulberry Group and Axfood AB
Assuming the 90 days trading horizon Mulberry Group PLC is expected to under-perform the Axfood AB. In addition to that, Mulberry Group is 2.33 times more volatile than Axfood AB. It trades about -0.09 of its total potential returns per unit of risk. Axfood AB is currently generating about -0.19 per unit of volatility. If you would invest 28,044 in Axfood AB on October 15, 2024 and sell it today you would lose (4,784) from holding Axfood AB or give up 17.06% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Mulberry Group PLC vs. Axfood AB
Performance |
| Timeline |
| Mulberry Group PLC |
| Axfood AB |
Mulberry Group and Axfood AB Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Mulberry Group and Axfood AB
The main advantage of trading using opposite Mulberry Group and Axfood AB positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Mulberry Group 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.| Mulberry Group vs. Sabre Insurance Group | Mulberry Group vs. Hecla Mining Co | Mulberry Group vs. UNIQA Insurance Group | Mulberry Group vs. Bisichi Mining PLC |
| Axfood AB vs. Herald Investment Trust | Axfood AB vs. Mineral Financial Investments | Axfood AB vs. Tavistock Investments Plc | Axfood AB vs. Beeks Trading |
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 Rebalancing module to analyze risk-adjusted returns against different time horizons to find asset-allocation targets.
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