Correlation Between Axa SA and Enstar Group
Can any of the company-specific risk be diversified away by investing in both Axa SA and Enstar Group 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 Enstar Group into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Axa SA ADR and Enstar Group Limited, you can compare the effects of market volatilities on Axa SA and Enstar Group 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 Enstar Group. Check out your portfolio center. Please also check ongoing floating volatility patterns of Axa SA and Enstar Group.
Diversification Opportunities for Axa SA and Enstar Group
-0.17 | Correlation Coefficient |
Good diversification
The 3 months correlation between Axa and Enstar is -0.17. Overlapping area represents the amount of risk that can be diversified away by holding Axa SA ADR and Enstar Group Limited in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Enstar Group Limited 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 ADR are associated (or correlated) with Enstar Group. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Enstar Group Limited has no effect on the direction of Axa SA i.e., Axa SA and Enstar Group go up and down completely randomly.
Pair Corralation between Axa SA and Enstar Group
If you would invest 32,482 in Enstar Group Limited on August 28, 2024 and sell it today you would earn a total of 56.00 from holding Enstar Group Limited or generate 0.17% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 4.76% |
| Values | Daily Returns |
Axa SA ADR vs. Enstar Group Limited
Performance |
| Timeline |
| Axa SA ADR |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
| Enstar Group Limited |
Axa SA and Enstar Group Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Axa SA and Enstar Group
The main advantage of trading using opposite Axa SA and Enstar Group positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Axa SA position performs unexpectedly, Enstar Group 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 Enstar Group will offset losses from the drop in Enstar Group's long position.The idea behind Axa SA ADR and Enstar Group Limited pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.| Enstar Group vs. Global Indemnity PLC | Enstar Group vs. Erie Indemnity | Enstar Group vs. AMERISAFE | Enstar Group vs. Diamond Hill Investment |
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 Bollinger Bands module to use Bollinger Bands indicator to analyze target price for a given investing horizon.
Other Complementary Tools
| Portfolio Volatility Check portfolio volatility and analyze historical return density to properly model market risk | |
| Bonds Directory Find actively traded corporate debentures issued by US companies | |
| Idea Analyzer Analyze all characteristics, volatility and risk-adjusted return of Macroaxis ideas | |
| Sync Your Broker Sync your existing holdings, watchlists, positions or portfolios from thousands of online brokerage services, banks, investment account aggregators and robo-advisors. | |
| Share Portfolio Track or share privately all of your investments from the convenience of any device |