Correlation Between SinterCast and Axfood AB

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

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

Diversification Opportunities for SinterCast and Axfood AB

0.8

Correlation Coefficient

SinterCast  Axfood AB

Very poor diversification

The 3 months correlation between SinterCast and Axfood is 0.8. Overlapping area represents the amount of risk that can be diversified away by holding SinterCast AB and Axfood AB in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Axfood AB and SinterCast 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 SinterCast 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 SinterCast i.e., SinterCast and Axfood AB go up and down completely randomly.

Pair Corralation between SinterCast and Axfood AB

Assuming the 90 days trading horizon SinterCast is expected to generate 1.02 times less return on investment than Axfood AB. In addition to that, SinterCast is 1.19 times more volatile than Axfood AB. It trades about 0.17 of its total potential returns per unit of risk. Axfood AB is currently generating about 0.21 per unit of volatility. If you would invest  24,910  in Axfood AB on April 22, 2025 and sell it today you would earn a total of  3,770  from holding Axfood AB or generate 15.13% return on investment over 90 days.

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

SinterCast AB  vs.  Axfood AB

SinterCast AB

Risk-Adjusted Performance

Good

Compared to the overall equity markets, risk-adjusted returns on investments in SinterCast AB are ranked lower than 13 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively uncertain basic indicators, SinterCast unveiled solid returns over the last few months and may actually be approaching a breakup point.

Axfood AB

Risk-Adjusted Performance

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in Axfood AB are ranked lower than 16 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively uncertain basic indicators, Axfood AB unveiled solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with SinterCast and Axfood AB

The main advantage of trading using opposite SinterCast and Axfood AB positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if SinterCast 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 SinterCast AB 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 Insider Screener module to find insiders across different sectors to evaluate their impact on performance.