Correlation Between Food Life and AXA SA
Can any of the company-specific risk be diversified away by investing in both Food Life 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 Food Life and AXA SA into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Food Life Companies and AXA SA, you can compare the effects of market volatilities on Food Life 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 Food Life with a short position of AXA SA. Check out your portfolio center. Please also check ongoing floating volatility patterns of Food Life and AXA SA.
Diversification Opportunities for Food Life and AXA SA
Pay attention - limited upside
The 3 months correlation between Food and AXA is -0.81. Overlapping area represents the amount of risk that can be diversified away by holding Food Life Companies and AXA SA in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on AXA SA and Food Life 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 Food Life Companies 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 Food Life i.e., Food Life and AXA SA go up and down completely randomly.
Pair Corralation between Food Life and AXA SA
Assuming the 90 days horizon Food Life Companies is expected to generate 1.18 times more return on investment than AXA SA. However, Food Life is 1.18 times more volatile than AXA SA. It trades about 0.33 of its potential returns per unit of risk. AXA SA is currently generating about -0.06 per unit of risk. If you would invest 1,890 in Food Life Companies on September 12, 2024 and sell it today you would earn a total of 250.00 from holding Food Life Companies or generate 13.23% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Food Life Companies vs. AXA SA
Performance |
| Timeline |
| Food Life Companies |
| AXA SA |
Food Life and AXA SA Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Food Life and AXA SA
The main advantage of trading using opposite Food Life and AXA SA positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Food Life 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.| Food Life vs. Starbucks | Food Life vs. Superior Plus Corp | Food Life vs. SIVERS SEMICONDUCTORS AB | Food Life vs. NorAm Drilling AS |
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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 Financial Widgets module to easily integrated Macroaxis content with over 30 different plug-and-play financial widgets.
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