Correlation Between AXA SA and Hartford Financial
Can any of the company-specific risk be diversified away by investing in both AXA SA and Hartford Financial 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 Hartford Financial into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between AXA SA and The Hartford Financial, you can compare the effects of market volatilities on AXA SA and Hartford Financial 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 Hartford Financial. Check out your portfolio center. Please also check ongoing floating volatility patterns of AXA SA and Hartford Financial.
Diversification Opportunities for AXA SA and Hartford Financial
-0.56 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between AXA and Hartford is -0.56. Overlapping area represents the amount of risk that can be diversified away by holding AXA SA and The Hartford Financial in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on The Hartford Financial 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 Hartford Financial. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of The Hartford Financial has no effect on the direction of AXA SA i.e., AXA SA and Hartford Financial go up and down completely randomly.
Pair Corralation between AXA SA and Hartford Financial
Assuming the 90 days trading horizon AXA SA is expected to under-perform the Hartford Financial. But the stock apears to be less risky and, when comparing its historical volatility, AXA SA is 1.21 times less risky than Hartford Financial. The stock trades about -0.16 of its potential returns per unit of risk. The The Hartford Financial is currently generating about 0.33 of returns per unit of risk over similar time horizon. If you would invest 10,155 in The Hartford Financial on September 5, 2024 and sell it today you would earn a total of 1,345 from holding The Hartford Financial or generate 13.24% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
AXA SA vs. The Hartford Financial
Performance |
| Timeline |
| AXA SA |
| The Hartford Financial |
AXA SA and Hartford Financial Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with AXA SA and Hartford Financial
The main advantage of trading using opposite AXA SA and Hartford Financial positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if AXA SA position performs unexpectedly, Hartford Financial 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 Hartford Financial will offset losses from the drop in Hartford Financial's long position.| AXA SA vs. Cogent Communications Holdings | AXA SA vs. Chunghwa Telecom Co | AXA SA vs. Hyster Yale Materials Handling | AXA SA vs. SK TELECOM TDADR |
| Hartford Financial vs. Berkshire Hathaway | Hartford Financial vs. AXA SA | Hartford Financial vs. AXA SA | Hartford Financial vs. Swiss Life Holding |
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 Fundamentals Comparison module to compare fundamentals across multiple equities to find investing opportunities.
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