Correlation Between Telia Company and Axfood AB

Specify exactly 2 symbols:
Can any of the company-specific risk be diversified away by investing in both Telia Company 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 Telia Company and Axfood AB into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Telia Company AB and Axfood AB, you can compare the effects of market volatilities on Telia Company 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 Telia Company with a short position of Axfood AB. Check out your portfolio center. Please also check ongoing floating volatility patterns of Telia Company and Axfood AB.

Diversification Opportunities for Telia Company and Axfood AB

TeliaAxfoodDiversified AwayTeliaAxfoodDiversified Away100%
0.11
  Correlation Coefficient

Average diversification

The 3 months correlation between Telia and Axfood is 0.11. Overlapping area represents the amount of risk that can be diversified away by holding Telia Company AB and Axfood AB in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Axfood AB and Telia Company 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 Telia Company 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 Telia Company i.e., Telia Company and Axfood AB go up and down completely randomly.

Pair Corralation between Telia Company and Axfood AB

Assuming the 90 days trading horizon Telia Company AB is expected to generate 1.03 times more return on investment than Axfood AB. However, Telia Company is 1.03 times more volatile than Axfood AB. It trades about 0.38 of its potential returns per unit of risk. Axfood AB is currently generating about -0.15 per unit of risk. If you would invest  3,136  in Telia Company AB on November 25, 2024 and sell it today you would earn a total of  270.00  from holding Telia Company AB or generate 8.61% return on investment over 90 days.
Time Period3 Months [change]
DirectionMoves Together 
StrengthInsignificant
Accuracy100.0%
ValuesDaily Returns

Telia Company AB  vs.  Axfood AB

 Performance 
JavaScript chart by amCharts 3.21.15Dec2025Feb -50510
JavaScript chart by amCharts 3.21.15TELIA AXFO
       Timeline  
Telia Company 

Risk-Adjusted Performance

Good

 
Weak
 
Strong
Compared to the overall equity markets, risk-adjusted returns on investments in Telia Company AB are ranked lower than 11 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively weak basic indicators, Telia Company may actually be approaching a critical reversion point that can send shares even higher in March 2025.
JavaScript chart by amCharts 3.21.15DecJanFebJanFeb3031323334
Axfood AB 

Risk-Adjusted Performance

Very Weak

 
Weak
 
Strong
Over the last 90 days Axfood AB has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of comparatively stable basic indicators, Axfood AB is not utilizing all of its potentials. The newest stock price uproar, may contribute to short-horizon losses for the private investors.
JavaScript chart by amCharts 3.21.15DecJanFebJanFeb225230235240245250255260

Telia Company and Axfood AB Volatility Contrast

   Predicted Return Density   
JavaScript chart by amCharts 3.21.15-3.0-2.25-1.5-0.74-0.01260.81.622.453.284.1 0.10.20.30.4
JavaScript chart by amCharts 3.21.15TELIA AXFO
       Returns  

Pair Trading with Telia Company and Axfood AB

The main advantage of trading using opposite Telia Company and Axfood AB positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Telia Company 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.
The idea behind Telia Company AB and Axfood AB pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.
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 Volatility Analysis module to get historical volatility and risk analysis based on latest market data.

Other Complementary Tools

Money Managers
Screen money managers from public funds and ETFs managed around the world
AI Portfolio Architect
Use AI to generate optimal portfolios and find profitable investment opportunities
Portfolio Rebalancing
Analyze risk-adjusted returns against different time horizons to find asset-allocation targets
Efficient Frontier
Plot and analyze your portfolio and positions against risk-return landscape of the market.
USA ETFs
Find actively traded Exchange Traded Funds (ETF) in USA