Correlation Between AXA SA and Ageas SA/NV

Can any of the company-specific risk be diversified away by investing in both AXA SA and Ageas SA/NV 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 AXA SA and Ageas SA/NV into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between AXA SA and ageas SANV, you can compare the effects of market volatilities on AXA SA and Ageas SA/NV 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 AXA SA with a short position of Ageas SA/NV. Check out your portfolio center. Please also check ongoing floating volatility patterns of AXA SA and Ageas SA/NV.

Diversification Opportunities for AXA SA and Ageas SA/NV

-0.54

Correlation Coefficient

AXA SA  Ageas SA/NV

Excellent diversification

The 3 months correlation between AXA and Ageas is -0.54. Overlapping area represents the amount of risk that can be diversified away by holding AXA SA and ageas SANV in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Ageas SA/NV and AXA SA 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 AXA SA are associated (or correlated) with Ageas SA/NV. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Ageas SA/NV has no effect on the direction of AXA SA i.e., AXA SA and Ageas SA/NV go up and down completely randomly.

Pair Corralation between AXA SA and Ageas SA/NV

Assuming the 90 days horizon AXA SA is expected to under-perform the Ageas SA/NV. But the otc stock apears to be less risky and, when comparing its historical volatility, AXA SA is 1.44 times less risky than Ageas SA/NV. The otc stock trades about -0.09 of its potential returns per unit of risk. The ageas SANV is currently generating about 0.1 of returns per unit of risk over similar time horizon. If you would invest  4,577  in ageas SANV on August 31, 2024 and sell it today you would earn a total of  688.00  from holding ageas SANV or generate 15.03% return on investment over 90 days.

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

AXA SA  vs.  ageas SANV

AXA SA

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days AXA SA has generated negative risk-adjusted returns adding no value to investors with long positions. Despite latest weak performance, the Stock's technical indicators remain stable and the current disturbance on Wall Street may also be a sign of long-run gains for the company stockholders.

Ageas SA/NV

Risk-Adjusted Performance

8 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in ageas SANV are ranked lower than 8 (%) of all global equities and portfolios over the last 90 days. Despite nearly unsteady basic indicators, Ageas SA/NV reported solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with AXA SA and Ageas SA/NV

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

The idea behind AXA SA and ageas SANV 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 Positions Ratings module to determine portfolio positions ratings based on digital equity recommendations. Macroaxis instant position ratings are based on combination of fundamental analysis and risk-adjusted market performance.