Correlation Between Axilion Smart and Millennium Food

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

By analyzing existing cross correlation between Axilion Smart Mobility and Millennium Food Tech LP, you can compare the effects of market volatilities on Axilion Smart and Millennium Food 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 Axilion Smart with a short position of Millennium Food. Check out your portfolio center. Please also check ongoing floating volatility patterns of Axilion Smart and Millennium Food.

Diversification Opportunities for Axilion Smart and Millennium Food

-0.21

Correlation Coefficient

Axilion Smart  Millennium Food

Very good diversification

The 3 months correlation between Axilion and Millennium is -0.21. Overlapping area represents the amount of risk that can be diversified away by holding Axilion Smart Mobility and Millennium Food Tech LP in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Millennium Food Tech and Axilion Smart 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 Axilion Smart Mobility are associated (or correlated) with Millennium Food. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Millennium Food Tech has no effect on the direction of Axilion Smart i.e., Axilion Smart and Millennium Food go up and down completely randomly.

Pair Corralation between Axilion Smart and Millennium Food

Assuming the 90 days trading horizon Axilion Smart Mobility is expected to under-perform the Millennium Food. In addition to that, Axilion Smart is 1.17 times more volatile than Millennium Food Tech LP. It trades about -0.2 of its total potential returns per unit of risk. Millennium Food Tech LP is currently generating about 0.07 per unit of volatility. If you would invest  17,350  in Millennium Food Tech LP on December 5, 2024 and sell it today you would earn a total of  1,540  from holding Millennium Food Tech LP or generate 8.88% return on investment over 90 days.

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

Axilion Smart Mobility  vs.  Millennium Food Tech LP

Axilion Smart Mobility

Risk-Adjusted Performance

Very Weak

Over the last 90 days Axilion Smart Mobility has generated negative risk-adjusted returns adding no value to investors with long positions. Despite weak performance in the last few months, the Stock's basic indicators remain somewhat strong which may send shares a bit higher in April 2025. The current disturbance may also be a sign of long term up-swing for the company investors.

Millennium Food Tech

Risk-Adjusted Performance

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in Millennium Food Tech LP are ranked lower than 5 (%) of all global equities and portfolios over the last 90 days. Despite somewhat weak basic indicators, Millennium Food sustained solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Axilion Smart and Millennium Food

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

The idea behind Axilion Smart Mobility and Millennium Food Tech LP 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 Stock Tickers module to use high-impact, comprehensive, and customizable stock tickers that can be easily integrated to any websites.