Correlation Between MSAD INSURANCE and AXA SA
Can any of the company-specific risk be diversified away by investing in both MSAD INSURANCE 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 MSAD INSURANCE and AXA SA into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between MSAD INSURANCE and AXA SA, you can compare the effects of market volatilities on MSAD INSURANCE 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 MSAD INSURANCE with a short position of AXA SA. Check out your portfolio center. Please also check ongoing floating volatility patterns of MSAD INSURANCE and AXA SA.
Diversification Opportunities for MSAD INSURANCE and AXA SA
-0.45 | Correlation Coefficient |
Very good diversification
The 3 months correlation between MSAD and AXA is -0.45. Overlapping area represents the amount of risk that can be diversified away by holding MSAD INSURANCE and AXA SA in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on AXA SA and MSAD INSURANCE 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 MSAD INSURANCE 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 MSAD INSURANCE i.e., MSAD INSURANCE and AXA SA go up and down completely randomly.
Pair Corralation between MSAD INSURANCE and AXA SA
Assuming the 90 days trading horizon MSAD INSURANCE is expected to generate 1.64 times more return on investment than AXA SA. However, MSAD INSURANCE is 1.64 times more volatile than AXA SA. It trades about 0.1 of its potential returns per unit of risk. AXA SA is currently generating about 0.06 per unit of risk. If you would invest 1,113 in MSAD INSURANCE on August 31, 2024 and sell it today you would earn a total of 987.00 from holding MSAD INSURANCE or generate 88.68% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 99.74% |
| Values | Daily Returns |
MSAD INSURANCE vs. AXA SA
Performance |
| Timeline |
| MSAD INSURANCE |
| AXA SA |
MSAD INSURANCE and AXA SA Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with MSAD INSURANCE and AXA SA
The main advantage of trading using opposite MSAD INSURANCE and AXA SA positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if MSAD INSURANCE 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.| MSAD INSURANCE vs. Games Workshop Group | MSAD INSURANCE vs. GAMING FAC SA | MSAD INSURANCE vs. GOODYEAR T RUBBER | MSAD INSURANCE vs. Compagnie Plastic Omnium |
| AXA SA vs. Automatic Data Processing | AXA SA vs. SBA Communications Corp | AXA SA vs. TERADATA | AXA SA vs. China Communications Services |
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 Global Correlations module to find global opportunities by holding instruments from different markets.
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