Correlation Between AMERISAFE and Axa Equitable
Can any of the company-specific risk be diversified away by investing in both AMERISAFE and Axa Equitable 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 AMERISAFE and Axa Equitable into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between AMERISAFE and Axa Equitable Holdings, you can compare the effects of market volatilities on AMERISAFE and Axa Equitable 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 AMERISAFE with a short position of Axa Equitable. Check out your portfolio center. Please also check ongoing floating volatility patterns of AMERISAFE and Axa Equitable.
Diversification Opportunities for AMERISAFE and Axa Equitable
0.9 | Correlation Coefficient |
Almost no diversification
The 3 months correlation between AMERISAFE and Axa is 0.9. Overlapping area represents the amount of risk that can be diversified away by holding AMERISAFE and Axa Equitable Holdings in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Axa Equitable Holdings and AMERISAFE 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 AMERISAFE are associated (or correlated) with Axa Equitable. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Axa Equitable Holdings has no effect on the direction of AMERISAFE i.e., AMERISAFE and Axa Equitable go up and down completely randomly.
Pair Corralation between AMERISAFE and Axa Equitable
Given the investment horizon of 90 days AMERISAFE is expected to generate 2.67 times less return on investment than Axa Equitable. But when comparing it to its historical volatility, AMERISAFE is 1.32 times less risky than Axa Equitable. It trades about 0.03 of its potential returns per unit of risk. Axa Equitable Holdings is currently generating about 0.06 of returns per unit of risk over similar time horizon. If you would invest 2,954 in Axa Equitable Holdings on August 24, 2024 and sell it today you would earn a total of 1,808 from holding Axa Equitable Holdings or generate 61.21% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
AMERISAFE vs. Axa Equitable Holdings
Performance |
| Timeline |
| AMERISAFE |
| Axa Equitable Holdings |
AMERISAFE and Axa Equitable Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with AMERISAFE and Axa Equitable
The main advantage of trading using opposite AMERISAFE and Axa Equitable positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if AMERISAFE position performs unexpectedly, Axa Equitable 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 Equitable will offset losses from the drop in Axa Equitable's long position.| AMERISAFE vs. Assured Guaranty | AMERISAFE vs. MBIA Inc | AMERISAFE vs. Enact Holdings | AMERISAFE vs. ICC Holdings |
| Axa Equitable vs. Global Indemnity PLC | Axa Equitable vs. Erie Indemnity | Axa Equitable vs. AMERISAFE | Axa Equitable vs. Diamond Hill 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 Positions Ratings module to determine portfolio positions ratings based on digital equity recommendations. Macroaxis instant position ratings are based on combination of fundamental analysis and risk-adjusted market performance.
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