Correlation Between NISSIN FOODS and Axfood AB
Can any of the company-specific risk be diversified away by investing in both NISSIN FOODS 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 NISSIN FOODS and Axfood AB into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between NISSIN FOODS HLDGS and Axfood AB, you can compare the effects of market volatilities on NISSIN FOODS 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 NISSIN FOODS with a short position of Axfood AB. Check out your portfolio center. Please also check ongoing floating volatility patterns of NISSIN FOODS and Axfood AB.
Diversification Opportunities for NISSIN FOODS and Axfood AB
0.42 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between NISSIN and Axfood is 0.42. Overlapping area represents the amount of risk that can be diversified away by holding NISSIN FOODS HLDGS and Axfood AB in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Axfood AB and NISSIN FOODS 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 NISSIN FOODS HLDGS 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 NISSIN FOODS i.e., NISSIN FOODS and Axfood AB go up and down completely randomly.
Pair Corralation between NISSIN FOODS and Axfood AB
Assuming the 90 days trading horizon NISSIN FOODS is expected to generate 7.53 times less return on investment than Axfood AB. But when comparing it to its historical volatility, NISSIN FOODS HLDGS is 1.54 times less risky than Axfood AB. It trades about 0.01 of its potential returns per unit of risk. Axfood AB is currently generating about 0.06 of returns per unit of risk over similar time horizon. If you would invest 1,174 in Axfood AB on September 14, 2024 and sell it today you would earn a total of 860.00 from holding Axfood AB or generate 73.25% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 99.8% |
| Values | Daily Returns |
NISSIN FOODS HLDGS vs. Axfood AB
Performance |
| Timeline |
| NISSIN FOODS HLDGS |
| Axfood AB |
NISSIN FOODS and Axfood AB Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with NISSIN FOODS and Axfood AB
The main advantage of trading using opposite NISSIN FOODS and Axfood AB positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if NISSIN FOODS 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.| NISSIN FOODS vs. Apple Inc | NISSIN FOODS vs. Apple Inc | NISSIN FOODS vs. Apple Inc | NISSIN FOODS vs. Apple Inc |
| Axfood AB vs. NISSIN FOODS HLDGS | Axfood AB vs. LIFEWAY FOODS | Axfood AB vs. Flowers Foods | Axfood AB vs. MOLSON RS BEVERAGE |
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 Competition Analyzer module to analyze and compare many basic indicators for a group of related or unrelated entities.
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