Correlation Between NN Group and AXA SA
Can any of the company-specific risk be diversified away by investing in both NN Group 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 NN Group and AXA SA into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between NN Group NV and AXA SA, you can compare the effects of market volatilities on NN Group 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 NN Group with a short position of AXA SA. Check out your portfolio center. Please also check ongoing floating volatility patterns of NN Group and AXA SA.
Diversification Opportunities for NN Group and AXA SA
Very weak diversification
The 3 months correlation between 2NN and AXA is 0.5. Overlapping area represents the amount of risk that can be diversified away by holding NN Group NV and AXA SA in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on AXA SA and NN Group 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 NN Group NV 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 NN Group i.e., NN Group and AXA SA go up and down completely randomly.
Pair Corralation between NN Group and AXA SA
Assuming the 90 days horizon NN Group NV is expected to generate 1.05 times more return on investment than AXA SA. However, NN Group is 1.05 times more volatile than AXA SA. It trades about 0.3 of its potential returns per unit of risk. AXA SA is currently generating about 0.01 per unit of risk. If you would invest 4,315 in NN Group NV on November 27, 2024 and sell it today you would earn a total of 345.00 from holding NN Group NV or generate 8.0% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 95.45% |
| Values | Daily Returns |
NN Group NV vs. AXA SA
Performance |
| Timeline |
| NN Group NV |
| AXA SA |
NN Group and AXA SA Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with NN Group and AXA SA
The main advantage of trading using opposite NN Group and AXA SA positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if NN Group 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.| NN Group vs. Cars Inc | NN Group vs. MidCap Financial Investment | NN Group vs. Guangdong Investment Limited | NN Group vs. Carsales |
| AXA SA vs. GMO INTERNET | AXA SA vs. Gol Intelligent Airlines | AXA SA vs. Aegean Airlines SA | AXA SA vs. United Internet AG |
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 Portfolio File Import module to quickly import all of your third-party portfolios from your local drive in csv format.
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