Correlation Between AXA SA and Iridium Communications
Can any of the company-specific risk be diversified away by investing in both AXA SA and Iridium Communications 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 SA and Iridium Communications into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between AXA SA and Iridium Communications, you can compare the effects of market volatilities on AXA SA and Iridium Communications 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 SA with a short position of Iridium Communications. Check out your portfolio center. Please also check ongoing floating volatility patterns of AXA SA and Iridium Communications.
Diversification Opportunities for AXA SA and Iridium Communications
-0.26 | Correlation Coefficient |
Very good diversification
The 3 months correlation between AXA and Iridium is -0.26. Overlapping area represents the amount of risk that can be diversified away by holding AXA SA and Iridium Communications in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Iridium Communications and AXA SA 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 SA are associated (or correlated) with Iridium Communications. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Iridium Communications has no effect on the direction of AXA SA i.e., AXA SA and Iridium Communications go up and down completely randomly.
Pair Corralation between AXA SA and Iridium Communications
Assuming the 90 days trading horizon AXA SA is expected to generate 8.7 times less return on investment than Iridium Communications. But when comparing it to its historical volatility, AXA SA is 2.36 times less risky than Iridium Communications. It trades about 0.0 of its potential returns per unit of risk. Iridium Communications is currently generating about 0.02 of returns per unit of risk over similar time horizon. If you would invest 2,766 in Iridium Communications on August 31, 2024 and sell it today you would earn a total of 19.00 from holding Iridium Communications or generate 0.69% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
AXA SA vs. Iridium Communications
Performance |
| Timeline |
| AXA SA |
| Iridium Communications |
AXA SA and Iridium Communications Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with AXA SA and Iridium Communications
The main advantage of trading using opposite AXA SA and Iridium Communications positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if AXA SA position performs unexpectedly, Iridium Communications 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 Iridium Communications will offset losses from the drop in Iridium Communications' long position.| AXA SA vs. Iridium Communications | AXA SA vs. SBA Communications Corp | AXA SA vs. Hemisphere Energy Corp | AXA SA vs. LION ONE METALS |
| Iridium Communications vs. ATT Inc | Iridium Communications vs. Deutsche Telekom AG | Iridium Communications vs. Superior Plus Corp | Iridium Communications vs. NMI Holdings |
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 Portfolio Volatility module to check portfolio volatility and analyze historical return density to properly model market risk.
Other Complementary Tools
| Price Transformation Use Price Transformation models to analyze the depth of different equity instruments across global markets | |
| Instant Ratings Determine any equity ratings based on digital recommendations. Macroaxis instant equity ratings are based on combination of fundamental analysis and risk-adjusted market performance | |
| Content Syndication Quickly integrate customizable finance content to your own investment portal | |
| My Watchlist Analysis Analyze my current watchlist and to refresh optimization strategy. Macroaxis watchlist is based on self-learning algorithm to remember stocks you like | |
| Economic Indicators Top statistical indicators that provide insights into how an economy is performing |