Correlation Between Axa Equitable and AXA SA

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

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

Diversification Opportunities for Axa Equitable and AXA SA

-0.71

Correlation Coefficient

Axa Equitable  AXA SA

Pay attention - limited upside

The 3 months correlation between Axa and AXA is -0.71. Overlapping area represents the amount of risk that can be diversified away by holding Axa Equitable Holdings and AXA SA in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on AXA SA and Axa Equitable 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 Equitable Holdings are associated (or correlated) with AXA SA. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of AXA SA has no effect on the direction of Axa Equitable i.e., Axa Equitable and AXA SA go up and down completely randomly.

Pair Corralation between Axa Equitable and AXA SA

Considering the 90-day investment horizon Axa Equitable Holdings is expected to generate 1.28 times more return on investment than AXA SA. However, Axa Equitable is 1.28 times more volatile than AXA SA. It trades about 0.12 of its potential returns per unit of risk. AXA SA is currently generating about -0.07 per unit of risk. If you would invest  4,115  in Axa Equitable Holdings on September 2, 2024 and sell it today you would earn a total of  708.00  from holding Axa Equitable Holdings or generate 17.21% return on investment over 90 days.

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

Axa Equitable Holdings  vs.  AXA SA

Axa Equitable Holdings

Risk-Adjusted Performance

9 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Axa Equitable Holdings are ranked lower than 9 (%) of all global equities and portfolios over the last 90 days. Despite fairly fragile basic indicators, Axa Equitable demonstrated solid returns over the last few months and may actually be approaching a breakup point.

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.

Pair Trading with Axa Equitable and AXA SA

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

The idea behind Axa Equitable Holdings and AXA SA 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 Portfolio Backtesting module to avoid under-diversification and over-optimization by backtesting your portfolios.