Correlation Between JERONIMO MARTINS and Axfood AB

Can any of the company-specific risk be diversified away by investing in both JERONIMO 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 JERONIMO 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 JERONIMO MARTINS UNADR2 and Axfood AB, you can compare the effects of market volatilities on JERONIMO 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 JERONIMO MARTINS with a short position of Axfood AB. Check out your portfolio center. Please also check ongoing floating volatility patterns of JERONIMO MARTINS and Axfood AB.

Diversification Opportunities for JERONIMO MARTINS and Axfood AB

0.61

Correlation Coefficient

JERONIMO MARTINS  Axfood AB

Poor diversification

The 3 months correlation between JERONIMO and Axfood is 0.61. Overlapping area represents the amount of risk that can be diversified away by holding JERONIMO MARTINS UNADR2 and Axfood AB in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Axfood AB and JERONIMO 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 JERONIMO MARTINS UNADR2 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 JERONIMO MARTINS i.e., JERONIMO MARTINS and Axfood AB go up and down completely randomly.

Pair Corralation between JERONIMO MARTINS and Axfood AB

Assuming the 90 days trading horizon JERONIMO MARTINS is expected to generate 4.31 times less return on investment than Axfood AB. But when comparing it to its historical volatility, JERONIMO MARTINS UNADR2 is 1.11 times less risky than Axfood AB. It trades about 0.03 of its potential returns per unit of risk. Axfood AB is currently generating about 0.11 of returns per unit of risk over similar time horizon. If you would invest  2,209  in Axfood AB on April 24, 2025 and sell it today you would earn a total of  292.00  from holding Axfood AB or generate 13.22% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Significant
Accuracy	98.44%
Values	Daily Returns

JERONIMO MARTINS UNADR2  vs.  Axfood AB

JERONIMO MARTINS UNADR2

Risk-Adjusted Performance

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in JERONIMO MARTINS UNADR2 are ranked lower than 2 (%) of all global equities and portfolios over the last 90 days. Despite nearly stable primary indicators, JERONIMO MARTINS is not utilizing all of its potentials. The latest stock price disturbance, may contribute to mid-run losses for the stockholders.

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 fragile essential indicators, Axfood AB reported solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with JERONIMO MARTINS and Axfood AB

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

The idea behind JERONIMO MARTINS UNADR2 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.

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 Premium Stories module to follow Macroaxis premium stories from verified contributors across different equity types, categories and coverage scope.