Correlation Between Redsense Medical and Axfood AB
Can any of the company-specific risk be diversified away by investing in both Redsense Medical 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 Redsense Medical and Axfood AB into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Redsense Medical AB and Axfood AB, you can compare the effects of market volatilities on Redsense Medical 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 Redsense Medical with a short position of Axfood AB. Check out your portfolio center. Please also check ongoing floating volatility patterns of Redsense Medical and Axfood AB.
Diversification Opportunities for Redsense Medical and Axfood AB
0.37 | Correlation Coefficient |
Weak diversification
The 3 months correlation between Redsense and Axfood is 0.37. Overlapping area represents the amount of risk that can be diversified away by holding Redsense Medical AB and Axfood AB in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Axfood AB and Redsense Medical 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 Redsense Medical AB 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 Redsense Medical i.e., Redsense Medical and Axfood AB go up and down completely randomly.
Pair Corralation between Redsense Medical and Axfood AB
Assuming the 90 days trading horizon Redsense Medical AB is expected to generate 3.59 times more return on investment than Axfood AB. However, Redsense Medical is 3.59 times more volatile than Axfood AB. It trades about 0.01 of its potential returns per unit of risk. Axfood AB is currently generating about -0.02 per unit of risk. If you would invest 770.00 in Redsense Medical AB on September 14, 2024 and sell it today you would lose (130.00) from holding Redsense Medical AB or give up 16.88% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Redsense Medical AB vs. Axfood AB
Performance |
| Timeline |
| Redsense Medical |
| Axfood AB |
Redsense Medical and Axfood AB Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Redsense Medical and Axfood AB
The main advantage of trading using opposite Redsense Medical and Axfood AB positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Redsense Medical 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.| Redsense Medical vs. Surgical Science Sweden | Redsense Medical vs. Bonesupport Holding AB | Redsense Medical vs. Swedencare publ AB | Redsense Medical vs. Oncopeptides AB |
| 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 Commodity Channel module to use Commodity Channel Index to analyze current equity momentum.
Other Complementary Tools
| Portfolio Rebalancing Analyze risk-adjusted returns against different time horizons to find asset-allocation targets | |
| Correlation Analysis Reduce portfolio risk simply by holding instruments which are not perfectly correlated | |
| FinTech Suite Use AI to screen and filter profitable investment opportunities | |
| CEOs Directory Screen CEOs from public companies around the world | |
| Headlines Timeline Stay connected to all market stories and filter out noise. Drill down to analyze hype elasticity |