Correlation Between AXA SA and Münchener Rückversicherung
Can any of the company-specific risk be diversified away by investing in both AXA SA and Münchener Rückversicherung 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 Münchener Rückversicherung into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between AXA SA and Mnchener Rckversicherungs Gesellschaft Aktiengesellschaft, you can compare the effects of market volatilities on AXA SA and Münchener Rückversicherung 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 Münchener Rückversicherung. Check out your portfolio center. Please also check ongoing floating volatility patterns of AXA SA and Münchener Rückversicherung.
Diversification Opportunities for AXA SA and Münchener Rückversicherung
0.69 | Correlation Coefficient |
Poor diversification
The 3 months correlation between AXA and Münchener is 0.69. Overlapping area represents the amount of risk that can be diversified away by holding AXA SA and Mnchener Rckversicherungs Gese in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Münchener Rückversicherung 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 Münchener Rückversicherung. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Münchener Rückversicherung has no effect on the direction of AXA SA i.e., AXA SA and Münchener Rückversicherung go up and down completely randomly.
Pair Corralation between AXA SA and Münchener Rückversicherung
Assuming the 90 days horizon AXA SA is expected to generate 1.82 times more return on investment than Münchener Rückversicherung. However, AXA SA is 1.82 times more volatile than Mnchener Rckversicherungs Gesellschaft Aktiengesellschaft. It trades about 0.04 of its potential returns per unit of risk. Mnchener Rckversicherungs Gesellschaft Aktiengesellschaft is currently generating about 0.06 per unit of risk. If you would invest 2,522 in AXA SA on September 2, 2024 and sell it today you would earn a total of 977.00 from holding AXA SA or generate 38.74% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 98.48% |
| Values | Daily Returns |
AXA SA vs. Mnchener Rckversicherungs Gese
Performance |
| Timeline |
| AXA SA |
| Münchener Rückversicherung |
AXA SA and Münchener Rückversicherung Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with AXA SA and Münchener Rückversicherung
The main advantage of trading using opposite AXA SA and Münchener Rückversicherung positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if AXA SA position performs unexpectedly, Münchener Rückversicherung 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 Münchener Rückversicherung will offset losses from the drop in Münchener Rückversicherung's long position.| AXA SA vs. ageas SANV | AXA SA vs. Athene Holding | AXA SA vs. Athene Holding | AXA SA vs. The Hartford Financial |
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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 Stock Screener module to find equities using a custom stock filter or screen asymmetry in trading patterns, price, volume, or investment outlook..
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