Correlation Between INTERNATIONAL ENERGY and AXAMANSARD INSURANCE

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

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

Diversification Opportunities for INTERNATIONAL ENERGY and AXAMANSARD INSURANCE

-0.45

Correlation Coefficient

INTERNATIONAL ENERGY  AXAMANSARD INSURANCE

Very good diversification

The 3 months correlation between INTERNATIONAL and AXAMANSARD is -0.45. Overlapping area represents the amount of risk that can be diversified away by holding INTERNATIONAL ENERGY INSURANCE and AXAMANSARD INSURANCE PLC in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on AXAMANSARD INSURANCE PLC and INTERNATIONAL ENERGY 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 INTERNATIONAL ENERGY INSURANCE are associated (or correlated) with AXAMANSARD INSURANCE. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of AXAMANSARD INSURANCE PLC has no effect on the direction of INTERNATIONAL ENERGY i.e., INTERNATIONAL ENERGY and AXAMANSARD INSURANCE go up and down completely randomly.

Pair Corralation between INTERNATIONAL ENERGY and AXAMANSARD INSURANCE

Assuming the 90 days trading horizon INTERNATIONAL ENERGY INSURANCE is expected to under-perform the AXAMANSARD INSURANCE. But the stock apears to be less risky and, when comparing its historical volatility, INTERNATIONAL ENERGY INSURANCE is 1.0 times less risky than AXAMANSARD INSURANCE. The stock trades about -0.03 of its potential returns per unit of risk. The AXAMANSARD INSURANCE PLC is currently generating about 0.21 of returns per unit of risk over similar time horizon. If you would invest  527.00  in AXAMANSARD INSURANCE PLC on September 13, 2024 and sell it today you would earn a total of  223.00  from holding AXAMANSARD INSURANCE PLC or generate 42.31% return on investment over 90 days.

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

INTERNATIONAL ENERGY INSURANCE  vs.  AXAMANSARD INSURANCE PLC

INTERNATIONAL ENERGY

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days INTERNATIONAL ENERGY INSURANCE has generated negative risk-adjusted returns adding no value to investors with long positions. Despite nearly stable basic indicators, INTERNATIONAL ENERGY is not utilizing all of its potentials. The recent stock price disturbance, may contribute to mid-run losses for the stockholders.

AXAMANSARD INSURANCE PLC

Risk-Adjusted Performance

16 of 100

Solid

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

Pair Trading with INTERNATIONAL ENERGY and AXAMANSARD INSURANCE

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

The idea behind INTERNATIONAL ENERGY INSURANCE and AXAMANSARD INSURANCE PLC 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 Stocks Directory module to find actively traded stocks across global markets.