Correlation Between AXA SA and Arch Capital
Can any of the company-specific risk be diversified away by investing in both AXA SA and Arch Capital 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 Arch Capital into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between AXA SA and Arch Capital Group, you can compare the effects of market volatilities on AXA SA and Arch Capital 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 Arch Capital. Check out your portfolio center. Please also check ongoing floating volatility patterns of AXA SA and Arch Capital.
Diversification Opportunities for AXA SA and Arch Capital
0.76 | Correlation Coefficient |
Poor diversification
The 3 months correlation between AXA and Arch is 0.76. Overlapping area represents the amount of risk that can be diversified away by holding AXA SA and Arch Capital Group in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Arch Capital 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 Arch Capital. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Arch Capital Group has no effect on the direction of AXA SA i.e., AXA SA and Arch Capital go up and down completely randomly.
Pair Corralation between AXA SA and Arch Capital
Assuming the 90 days horizon AXA SA is expected to generate 2.74 times more return on investment than Arch Capital. However, AXA SA is 2.74 times more volatile than Arch Capital Group. It trades about 0.04 of its potential returns per unit of risk. Arch Capital Group is currently generating about 0.02 per unit of risk. If you would invest 3,214 in AXA SA on August 28, 2024 and sell it today you would earn a total of 331.00 from holding AXA SA or generate 10.3% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 92.34% |
| Values | Daily Returns |
AXA SA vs. Arch Capital Group
Performance |
| Timeline |
| AXA SA |
| Arch Capital Group |
AXA SA and Arch Capital Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with AXA SA and Arch Capital
The main advantage of trading using opposite AXA SA and Arch Capital positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if AXA SA position performs unexpectedly, Arch Capital 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 Arch Capital will offset losses from the drop in Arch Capital's long position.| AXA SA vs. Assicurazioni Generali SpA | AXA SA vs. Athene Holding | AXA SA vs. Athene Holding | AXA SA vs. Arch Capital Group |
| Arch Capital vs. Athene Holding | Arch Capital vs. The Hartford Financial | Arch Capital vs. Arch Capital Group | Arch Capital vs. Athene 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 Portfolio File Import module to quickly import all of your third-party portfolios from your local drive in csv format.
Other Complementary Tools
| 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 | |
| Economic Indicators Top statistical indicators that provide insights into how an economy is performing | |
| Idea Breakdown Analyze constituents of all Macroaxis ideas. Macroaxis investment ideas are predefined, sector-focused investing themes | |
| Latest Portfolios Quick portfolio dashboard that showcases your latest portfolios | |
| Pair Correlation Compare performance and examine fundamental relationship between any two equity instruments |