Correlation Between Volkswagen and Axfood AB

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

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

Diversification Opportunities for Volkswagen and Axfood AB

0.0

Correlation Coefficient

Volkswagen  Axfood AB

Pay attention - limited upside

The 3 months correlation between Volkswagen and Axfood is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding Volkswagen AG Non Vtg and Axfood AB in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Axfood AB and Volkswagen 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 Volkswagen AG Non Vtg 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 Volkswagen i.e., Volkswagen and Axfood AB go up and down completely randomly.

Pair Corralation between Volkswagen and Axfood AB

If you would invest  0.00  in Volkswagen AG Non Vtg on October 24, 2024 and sell it today you would earn a total of  0.00  from holding Volkswagen AG Non Vtg or generate 0.0% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Flat
Strength	Insignificant
Accuracy	1.61%
Values	Daily Returns

Volkswagen AG Non Vtg  vs.  Axfood AB

Volkswagen AG Non

Risk-Adjusted Performance

0 of 100

Weak

Over the last 90 days Volkswagen AG Non Vtg has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of comparatively stable basic indicators, Volkswagen is not utilizing all of its potentials. The current stock price uproar, may contribute to short-horizon losses for the private investors.

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 comparatively stable basic indicators, Axfood AB is not utilizing all of its potentials. The current stock price uproar, may contribute to short-horizon losses for the private investors.

Pair Trading with Volkswagen and Axfood AB

The main advantage of trading using opposite Volkswagen and Axfood AB positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Volkswagen 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 Volkswagen AG Non Vtg 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.

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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 Idea Breakdown module to analyze constituents of all Macroaxis ideas. Macroaxis investment ideas are predefined, sector-focused investing themes.