Correlation Between AXA World and BEKA LUX

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Can any of the company-specific risk be diversified away by investing in both AXA World and BEKA LUX 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 AXA World and BEKA LUX into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between AXA World Funds and BEKA LUX SICAV, you can compare the effects of market volatilities on AXA World and BEKA LUX 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 AXA World with a short position of BEKA LUX. Check out your portfolio center. Please also check ongoing floating volatility patterns of AXA World and BEKA LUX.

Diversification Opportunities for AXA World and BEKA LUX

-0.24
  Correlation Coefficient

Very good diversification

The 3 months correlation between AXA and BEKA is -0.24. Overlapping area represents the amount of risk that can be diversified away by holding AXA World Funds and BEKA LUX SICAV in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on BEKA LUX SICAV and AXA World 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 AXA World Funds are associated (or correlated) with BEKA LUX. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of BEKA LUX SICAV has no effect on the direction of AXA World i.e., AXA World and BEKA LUX go up and down completely randomly.

Pair Corralation between AXA World and BEKA LUX

Assuming the 90 days trading horizon AXA World Funds is expected to generate 2.52 times more return on investment than BEKA LUX. However, AXA World is 2.52 times more volatile than BEKA LUX SICAV. It trades about 0.04 of its potential returns per unit of risk. BEKA LUX SICAV is currently generating about 0.05 per unit of risk. If you would invest  20,281  in AXA World Funds on September 12, 2024 and sell it today you would earn a total of  982.00  from holding AXA World Funds or generate 4.84% return on investment over 90 days.
Time Period3 Months [change]
DirectionMoves Against 
StrengthInsignificant
Accuracy97.21%
ValuesDaily Returns

AXA World Funds  vs.  BEKA LUX SICAV

 Performance 
       Timeline  
AXA World Funds 

Risk-Adjusted Performance

0 of 100

 
Weak
 
Strong
Very Weak
Over the last 90 days AXA World Funds has generated negative risk-adjusted returns adding no value to fund investors. Despite nearly stable basic indicators, AXA World is not utilizing all of its potentials. The recent stock price disturbance, may contribute to mid-run losses for the stockholders.
BEKA LUX SICAV 

Risk-Adjusted Performance

11 of 100

 
Weak
 
Strong
Good
Compared to the overall equity markets, risk-adjusted returns on investments in BEKA LUX SICAV are ranked lower than 11 (%) of all funds and portfolios of funds over the last 90 days. In spite of very healthy basic indicators, BEKA LUX is not utilizing all of its potentials. The current stock price disarray, may contribute to short-term losses for the investors.

AXA World and BEKA LUX Volatility Contrast

   Predicted Return Density   
       Returns  

Pair Trading with AXA World and BEKA LUX

The main advantage of trading using opposite AXA World and BEKA LUX positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if AXA World position performs unexpectedly, BEKA LUX 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 BEKA LUX will offset losses from the drop in BEKA LUX's long position.
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The idea behind AXA World Funds and BEKA LUX SICAV pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.
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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 FinTech Suite module to use AI to screen and filter profitable investment opportunities.

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