Correlation Between Polar Capital and Axfood AB
Can any of the company-specific risk be diversified away by investing in both Polar Capital 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 Polar Capital and Axfood AB into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Polar Capital Technology and Axfood AB, you can compare the effects of market volatilities on Polar Capital 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 Polar Capital with a short position of Axfood AB. Check out your portfolio center. Please also check ongoing floating volatility patterns of Polar Capital and Axfood AB.
Diversification Opportunities for Polar Capital and Axfood AB
-0.46 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Polar and Axfood is -0.46. Overlapping area represents the amount of risk that can be diversified away by holding Polar Capital Technology and Axfood AB in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Axfood AB and Polar Capital 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 Polar Capital Technology 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 Polar Capital i.e., Polar Capital and Axfood AB go up and down completely randomly.
Pair Corralation between Polar Capital and Axfood AB
Assuming the 90 days trading horizon Polar Capital Technology is expected to generate 0.99 times more return on investment than Axfood AB. However, Polar Capital Technology is 1.01 times less risky than Axfood AB. It trades about 0.13 of its potential returns per unit of risk. Axfood AB is currently generating about -0.02 per unit of risk. If you would invest 23,800 in Polar Capital Technology on October 28, 2024 and sell it today you would earn a total of 14,450 from holding Polar Capital Technology or generate 60.71% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Polar Capital Technology vs. Axfood AB
Performance |
| Timeline |
| Polar Capital Technology |
| Axfood AB |
Polar Capital and Axfood AB Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Polar Capital and Axfood AB
The main advantage of trading using opposite Polar Capital and Axfood AB positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Polar Capital 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.| Polar Capital vs. Zegona Communications Plc | Polar Capital vs. Catena Media PLC | Polar Capital vs. Flutter Entertainment PLC | Polar Capital vs. Intermediate Capital Group |
| Axfood AB vs. Berkshire Hathaway | Axfood AB vs. Samsung Electronics Co | Axfood AB vs. Samsung Electronics Co | Axfood AB vs. Chocoladefabriken Lindt Spruengli |
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 Comparator module to compare the composition, asset allocations and performance of any two portfolios in your account.
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