Correlation Between AXA World and FF Global
Can any of the company-specific risk be diversified away by investing in both AXA World and FF Global 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 FF Global 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 FF Global, you can compare the effects of market volatilities on AXA World and FF Global 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 FF Global. Check out your portfolio center. Please also check ongoing floating volatility patterns of AXA World and FF Global.
Diversification Opportunities for AXA World and FF Global
Excellent diversification
The 3 months correlation between AXA and FJ2P is -0.65. Overlapping area represents the amount of risk that can be diversified away by holding AXA World Funds and FF Global in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on FF Global 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 FF Global. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of FF Global has no effect on the direction of AXA World i.e., AXA World and FF Global go up and down completely randomly.
Pair Corralation between AXA World and FF Global
Assuming the 90 days trading horizon AXA World is expected to generate 7.39 times less return on investment than FF Global. But when comparing it to its historical volatility, AXA World Funds is 4.69 times less risky than FF Global. It trades about 0.04 of its potential returns per unit of risk. FF Global is currently generating about 0.06 of returns per unit of risk over similar time horizon. If you would invest 6,253 in FF Global on September 3, 2024 and sell it today you would earn a total of 1,074 from holding FF Global or generate 17.18% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 39.92% |
| Values | Daily Returns |
AXA World Funds vs. FF Global
Performance |
| Timeline |
| AXA World Funds |
| FF Global |
AXA World and FF Global Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with AXA World and FF Global
The main advantage of trading using opposite AXA World and FF Global positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if AXA World position performs unexpectedly, FF Global 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 FF Global will offset losses from the drop in FF Global's long position.| AXA World vs. Groupama Entreprises N | AXA World vs. Renaissance Europe C | AXA World vs. Superior Plus Corp | AXA World vs. Origin Agritech |
| FF Global vs. Groupama Entreprises N | FF Global vs. Renaissance Europe C | FF Global vs. Superior Plus Corp | FF Global vs. Origin Agritech |
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 USA ETFs module to find actively traded Exchange Traded Funds (ETF) in USA.
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