Correlation Between SBA Communications and AXA SA
Can any of the company-specific risk be diversified away by investing in both SBA Communications 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 SBA Communications and AXA SA into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between SBA Communications Corp and AXA SA, you can compare the effects of market volatilities on SBA Communications 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 SBA Communications with a short position of AXA SA. Check out your portfolio center. Please also check ongoing floating volatility patterns of SBA Communications and AXA SA.
Diversification Opportunities for SBA Communications and AXA SA
0.44 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between SBA and AXA is 0.44. Overlapping area represents the amount of risk that can be diversified away by holding SBA Communications Corp and AXA SA in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on AXA SA and SBA Communications 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 SBA Communications Corp 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 SBA Communications i.e., SBA Communications and AXA SA go up and down completely randomly.
Pair Corralation between SBA Communications and AXA SA
Assuming the 90 days trading horizon SBA Communications Corp is expected to under-perform the AXA SA. In addition to that, SBA Communications is 1.36 times more volatile than AXA SA. It trades about -0.02 of its total potential returns per unit of risk. AXA SA is currently generating about 0.05 per unit of volatility. If you would invest 2,429 in AXA SA on September 3, 2024 and sell it today you would earn a total of 854.00 from holding AXA SA or generate 35.16% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
SBA Communications Corp vs. AXA SA
Performance |
| Timeline |
| SBA Communications Corp |
| AXA SA |
SBA Communications and AXA SA Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with SBA Communications and AXA SA
The main advantage of trading using opposite SBA Communications and AXA SA positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if SBA Communications 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.| SBA Communications vs. Luckin Coffee | SBA Communications vs. REVO INSURANCE SPA | SBA Communications vs. Selective Insurance Group | SBA Communications vs. Goosehead Insurance |
| AXA SA vs. Spirent Communications plc | AXA SA vs. Entravision Communications | AXA SA vs. Alfa Financial Software | AXA SA vs. Eidesvik Offshore ASA |
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 Share Portfolio module to track or share privately all of your investments from the convenience of any device.
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