Correlation Between AXA SA and Swiss Life
Can any of the company-specific risk be diversified away by investing in both AXA SA and Swiss Life 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 Swiss Life into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between AXA SA and Swiss Life Holding, you can compare the effects of market volatilities on AXA SA and Swiss Life 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 Swiss Life. Check out your portfolio center. Please also check ongoing floating volatility patterns of AXA SA and Swiss Life.
Diversification Opportunities for AXA SA and Swiss Life
-0.42 | Correlation Coefficient |
Very good diversification
The 3 months correlation between AXA and Swiss is -0.42. Overlapping area represents the amount of risk that can be diversified away by holding AXA SA and Swiss Life Holding in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Swiss Life Holding 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 Swiss Life. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Swiss Life Holding has no effect on the direction of AXA SA i.e., AXA SA and Swiss Life go up and down completely randomly.
Pair Corralation between AXA SA and Swiss Life
Assuming the 90 days trading horizon AXA SA is expected to under-perform the Swiss Life. But the stock apears to be less risky and, when comparing its historical volatility, AXA SA is 1.94 times less risky than Swiss Life. The stock trades about -0.12 of its potential returns per unit of risk. The Swiss Life Holding is currently generating about 0.04 of returns per unit of risk over similar time horizon. If you would invest 3,760 in Swiss Life Holding on September 5, 2024 and sell it today you would earn a total of 120.00 from holding Swiss Life Holding or generate 3.19% 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. Swiss Life Holding
Performance |
| Timeline |
| AXA SA |
| Swiss Life Holding |
AXA SA and Swiss Life Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with AXA SA and Swiss Life
The main advantage of trading using opposite AXA SA and Swiss Life positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if AXA SA position performs unexpectedly, Swiss Life 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 Swiss Life will offset losses from the drop in Swiss Life'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 |
| Swiss Life vs. WisdomTree Investments | Swiss Life vs. AWILCO DRILLING PLC | Swiss Life vs. ECHO INVESTMENT ZY | Swiss Life vs. BORR DRILLING NEW |
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 Content Syndication module to quickly integrate customizable finance content to your own investment portal.
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