Correlation Between Rejlers AB and Axfood AB
Can any of the company-specific risk be diversified away by investing in both Rejlers AB 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 Rejlers AB and Axfood AB into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Rejlers AB and Axfood AB, you can compare the effects of market volatilities on Rejlers AB 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 Rejlers AB with a short position of Axfood AB. Check out your portfolio center. Please also check ongoing floating volatility patterns of Rejlers AB and Axfood AB.
Diversification Opportunities for Rejlers AB and Axfood AB
0.37 | Correlation Coefficient |
Weak diversification
The 3 months correlation between Rejlers and Axfood is 0.37. Overlapping area represents the amount of risk that can be diversified away by holding Rejlers AB and Axfood AB in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Axfood AB and Rejlers 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 Rejlers 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 Rejlers AB i.e., Rejlers AB and Axfood AB go up and down completely randomly.
Pair Corralation between Rejlers AB and Axfood AB
Assuming the 90 days trading horizon Rejlers AB is expected to generate 1.02 times more return on investment than Axfood AB. However, Rejlers AB is 1.02 times more volatile than Axfood AB. It trades about 0.02 of its potential returns per unit of risk. Axfood AB is currently generating about -0.18 per unit of risk. If you would invest 14,560 in Rejlers AB on September 5, 2024 and sell it today you would earn a total of 100.00 from holding Rejlers AB or generate 0.69% return on investment over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Together |
Strength | Very Weak |
Accuracy | 100.0% |
Values | Daily Returns |
Rejlers AB vs. Axfood AB
Performance |
Timeline |
Rejlers AB |
Axfood AB |
Rejlers AB and Axfood AB Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with Rejlers AB and Axfood AB
The main advantage of trading using opposite Rejlers AB and Axfood AB positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Rejlers AB 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.Rejlers AB vs. Instalco Intressenter AB | Rejlers AB vs. Volati AB | Rejlers AB vs. Fasadgruppen Group AB | Rejlers AB vs. Sdiptech AB |
Axfood AB vs. Rejlers AB | Axfood AB vs. Stille AB | Axfood AB vs. New Nordic Healthbrands | Axfood AB vs. Midsona 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 Competition Analyzer module to analyze and compare many basic indicators for a group of related or unrelated entities.
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