Correlation Between Jernimo Martins and Axfood AB
Can any of the company-specific risk be diversified away by investing in both Jernimo Martins 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 Jernimo Martins and Axfood AB into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Jernimo Martins SGPS and Axfood AB, you can compare the effects of market volatilities on Jernimo Martins 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 Jernimo Martins with a short position of Axfood AB. Check out your portfolio center. Please also check ongoing floating volatility patterns of Jernimo Martins and Axfood AB.
Diversification Opportunities for Jernimo Martins and Axfood AB
-0.6 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Jernimo and Axfood is -0.6. Overlapping area represents the amount of risk that can be diversified away by holding Jernimo Martins SGPS and Axfood AB in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Axfood AB and Jernimo Martins 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 Jernimo Martins SGPS 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 Jernimo Martins i.e., Jernimo Martins and Axfood AB go up and down completely randomly.
Pair Corralation between Jernimo Martins and Axfood AB
Assuming the 90 days horizon Jernimo Martins SGPS is expected to generate 1.01 times more return on investment than Axfood AB. However, Jernimo Martins is 1.01 times more volatile than Axfood AB. It trades about 0.08 of its potential returns per unit of risk. Axfood AB is currently generating about -0.14 per unit of risk. If you would invest 1,655 in Jernimo Martins SGPS on September 23, 2024 and sell it today you would earn a total of 150.00 from holding Jernimo Martins SGPS or generate 9.06% return on investment over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Against |
Strength | Weak |
Accuracy | 100.0% |
Values | Daily Returns |
Jernimo Martins SGPS vs. Axfood AB
Performance |
Timeline |
Jernimo Martins SGPS |
Axfood AB |
Jernimo Martins and Axfood AB Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with Jernimo Martins and Axfood AB
The main advantage of trading using opposite Jernimo Martins and Axfood AB positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Jernimo Martins 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.Jernimo Martins vs. Shin Etsu Chemical Co | Jernimo Martins vs. PTT Global Chemical | Jernimo Martins vs. Waste Management | Jernimo Martins vs. China BlueChemical |
Axfood AB vs. Sysco | Axfood AB vs. Jernimo Martins SGPS | Axfood AB vs. JERONIMO MARTINS UNADR2 | Axfood AB vs. Performance Food Group |
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 Bond Analysis module to evaluate and analyze corporate bonds as a potential investment for your portfolios..
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