Correlation Between Axfood AB and Intuitive Investments

Can any of the company-specific risk be diversified away by investing in both Axfood AB and Intuitive Investments 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 Axfood AB and Intuitive Investments into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between Axfood AB and Intuitive Investments Group, you can compare the effects of market volatilities on Axfood AB and Intuitive Investments 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 Axfood AB with a short position of Intuitive Investments. Check out your portfolio center. Please also check ongoing floating volatility patterns of Axfood AB and Intuitive Investments.

Diversification Opportunities for Axfood AB and Intuitive Investments

0.82

Correlation Coefficient

Axfood AB  Intuitive Investments

Very poor diversification

The 3 months correlation between Axfood and Intuitive is 0.82. Overlapping area represents the amount of risk that can be diversified away by holding Axfood AB and Intuitive Investments Group in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Intuitive Investments and Axfood AB 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 Axfood AB are associated (or correlated) with Intuitive Investments. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Intuitive Investments has no effect on the direction of Axfood AB i.e., Axfood AB and Intuitive Investments go up and down completely randomly.

Pair Corralation between Axfood AB and Intuitive Investments

Assuming the 90 days trading horizon Axfood AB is expected to under-perform the Intuitive Investments. In addition to that, Axfood AB is 1.06 times more volatile than Intuitive Investments Group. It trades about -0.21 of its total potential returns per unit of risk. Intuitive Investments Group is currently generating about -0.21 per unit of volatility. If you would invest  13,450  in Intuitive Investments Group on September 26, 2024 and sell it today you would lose (2,400) from holding Intuitive Investments Group or give up 17.84% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Strong
Accuracy	100.0%
Values	Daily Returns

Axfood AB  vs.  Intuitive Investments Group

Axfood AB

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Axfood AB has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of unsteady performance in the last few months, the Stock's basic indicators remain comparatively stable which may send shares a bit higher in January 2025. The newest uproar may also be a sign of mid-term up-swing for the firm private investors.

Intuitive Investments

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Intuitive Investments Group has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of unsteady performance in the last few months, the Stock's technical and fundamental indicators remain rather sound which may send shares a bit higher in January 2025. The latest tumult may also be a sign of longer-term up-swing for the firm shareholders.

Pair Trading with Axfood AB and Intuitive Investments

The main advantage of trading using opposite Axfood AB and Intuitive Investments positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Axfood AB position performs unexpectedly, Intuitive Investments 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 Intuitive Investments will offset losses from the drop in Intuitive Investments' long position.

The idea behind Axfood AB and Intuitive Investments Group 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.

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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 Equity Forecasting module to use basic forecasting models to generate price predictions and determine price momentum.