Correlation Between AXA SA and VIVA WINE
Can any of the company-specific risk be diversified away by investing in both AXA SA and VIVA WINE 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 VIVA WINE into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between AXA SA and VIVA WINE GROUP, you can compare the effects of market volatilities on AXA SA and VIVA WINE 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 VIVA WINE. Check out your portfolio center. Please also check ongoing floating volatility patterns of AXA SA and VIVA WINE.
Diversification Opportunities for AXA SA and VIVA WINE
Very weak diversification
The 3 months correlation between AXA and VIVA is 0.55. Overlapping area represents the amount of risk that can be diversified away by holding AXA SA and VIVA WINE GROUP in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on VIVA WINE GROUP 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 VIVA WINE. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of VIVA WINE GROUP has no effect on the direction of AXA SA i.e., AXA SA and VIVA WINE go up and down completely randomly.
Pair Corralation between AXA SA and VIVA WINE
Assuming the 90 days trading horizon AXA SA is expected to generate 0.52 times more return on investment than VIVA WINE. However, AXA SA is 1.91 times less risky than VIVA WINE. It trades about 0.1 of its potential returns per unit of risk. VIVA WINE GROUP is currently generating about 0.02 per unit of risk. If you would invest 3,407 in AXA SA on October 9, 2024 and sell it today you would earn a total of 42.00 from holding AXA SA or generate 1.23% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
AXA SA vs. VIVA WINE GROUP
Performance |
| Timeline |
| AXA SA |
| VIVA WINE GROUP |
AXA SA and VIVA WINE Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with AXA SA and VIVA WINE
The main advantage of trading using opposite AXA SA and VIVA WINE positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if AXA SA position performs unexpectedly, VIVA WINE 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 VIVA WINE will offset losses from the drop in VIVA WINE's long position.| AXA SA vs. Heidelberg Materials AG | AXA SA vs. International Game Technology | AXA SA vs. MOVIE GAMES SA | AXA SA vs. Materialise NV |
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 Top Crypto Exchanges module to search and analyze digital assets across top global cryptocurrency exchanges.
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