Correlation Between AXA SA and Compagnie Des

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

By analyzing existing cross correlation between AXA SA and Compagnie des Alpes, you can compare the effects of market volatilities on AXA SA and Compagnie Des 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 Compagnie Des. Check out your portfolio center. Please also check ongoing floating volatility patterns of AXA SA and Compagnie Des.

Diversification Opportunities for AXA SA and Compagnie Des

-0.66

Correlation Coefficient

AXA SA  Compagnie Des

Excellent diversification

The 3 months correlation between AXA and Compagnie is -0.66. Overlapping area represents the amount of risk that can be diversified away by holding AXA SA and Compagnie des Alpes in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Compagnie des Alpes 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 Compagnie Des. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Compagnie des Alpes has no effect on the direction of AXA SA i.e., AXA SA and Compagnie Des go up and down completely randomly.

Pair Corralation between AXA SA and Compagnie Des

Assuming the 90 days horizon AXA SA is expected to under-perform the Compagnie Des. In addition to that, AXA SA is 1.02 times more volatile than Compagnie des Alpes. It trades about -0.09 of its total potential returns per unit of risk. Compagnie des Alpes is currently generating about 0.13 per unit of volatility. If you would invest  1,364  in Compagnie des Alpes on September 13, 2024 and sell it today you would earn a total of  122.00  from holding Compagnie des Alpes or generate 8.94% return on investment over 90 days.

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

AXA SA  vs.  Compagnie des Alpes

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 basic indicators remain strong and the current disturbance on Wall Street may also be a sign of long term gains for the company investors.

Compagnie des Alpes

Risk-Adjusted Performance

9 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Compagnie des Alpes are ranked lower than 9 (%) of all global equities and portfolios over the last 90 days. Despite somewhat weak basic indicators, Compagnie Des may actually be approaching a critical reversion point that can send shares even higher in January 2025.

Pair Trading with AXA SA and Compagnie Des

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

The idea behind AXA SA and Compagnie des Alpes 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 Share Portfolio module to track or share privately all of your investments from the convenience of any device.