Correlation Between Axfood AB and THAI BEVERAGE

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

By analyzing existing cross correlation between Axfood AB and THAI BEVERAGE, you can compare the effects of market volatilities on Axfood AB and THAI BEVERAGE 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 THAI BEVERAGE. Check out your portfolio center. Please also check ongoing floating volatility patterns of Axfood AB and THAI BEVERAGE.

Diversification Opportunities for Axfood AB and THAI BEVERAGE

-0.55

Correlation Coefficient

Axfood AB  THAI BEVERAGE

Excellent diversification

The 3 months correlation between Axfood and THAI is -0.55. Overlapping area represents the amount of risk that can be diversified away by holding Axfood AB and THAI BEVERAGE in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on THAI BEVERAGE 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 THAI BEVERAGE. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of THAI BEVERAGE has no effect on the direction of Axfood AB i.e., Axfood AB and THAI BEVERAGE go up and down completely randomly.

Pair Corralation between Axfood AB and THAI BEVERAGE

Assuming the 90 days trading horizon Axfood AB is expected to generate 0.92 times more return on investment than THAI BEVERAGE. However, Axfood AB is 1.09 times less risky than THAI BEVERAGE. It trades about 0.13 of its potential returns per unit of risk. THAI BEVERAGE is currently generating about -0.01 per unit of risk. If you would invest  2,211  in Axfood AB on April 20, 2025 and sell it today you would earn a total of  326.00  from holding Axfood AB or generate 14.74% return on investment over 90 days.

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

Axfood AB  vs.  THAI BEVERAGE

Axfood AB

Risk-Adjusted Performance

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Axfood AB are ranked lower than 9 (%) of all global equities and portfolios over the last 90 days. Despite nearly uncertain essential indicators, Axfood AB reported solid returns over the last few months and may actually be approaching a breakup point.

THAI BEVERAGE

Risk-Adjusted Performance

Very Weak

Over the last 90 days THAI BEVERAGE has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of rather sound basic indicators, THAI BEVERAGE is not utilizing all of its potentials. The newest stock price tumult, may contribute to shorter-term losses for the shareholders.

Pair Trading with Axfood AB and THAI BEVERAGE

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

The idea behind Axfood AB and THAI BEVERAGE 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 Money Managers module to screen money managers from public funds and ETFs managed around the world.