Correlation Between AXIS Capital and Citizens
Can any of the company-specific risk be diversified away by investing in both AXIS Capital and Citizens 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 AXIS Capital and Citizens into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between AXIS Capital Holdings and Citizens, you can compare the effects of market volatilities on AXIS Capital and Citizens 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 AXIS Capital with a short position of Citizens. Check out your portfolio center. Please also check ongoing floating volatility patterns of AXIS Capital and Citizens.
Diversification Opportunities for AXIS Capital and Citizens
0.55 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between AXIS and Citizens is 0.55. Overlapping area represents the amount of risk that can be diversified away by holding AXIS Capital Holdings and Citizens in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Citizens and AXIS Capital 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 AXIS Capital Holdings are associated (or correlated) with Citizens. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Citizens has no effect on the direction of AXIS Capital i.e., AXIS Capital and Citizens go up and down completely randomly.
Pair Corralation between AXIS Capital and Citizens
Considering the 90-day investment horizon AXIS Capital is expected to generate 1.98 times less return on investment than Citizens. But when comparing it to its historical volatility, AXIS Capital Holdings is 2.76 times less risky than Citizens. It trades about 0.07 of its potential returns per unit of risk. Citizens is currently generating about 0.05 of returns per unit of risk over similar time horizon. If you would invest 245.00 in Citizens on September 1, 2024 and sell it today you would earn a total of 203.00 from holding Citizens or generate 82.86% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
AXIS Capital Holdings vs. Citizens
Performance |
| Timeline |
| AXIS Capital Holdings |
| Citizens |
AXIS Capital and Citizens Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with AXIS Capital and Citizens
The main advantage of trading using opposite AXIS Capital and Citizens positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if AXIS Capital position performs unexpectedly, Citizens 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 Citizens will offset losses from the drop in Citizens' long position.| AXIS Capital vs. Assured Guaranty | AXIS Capital vs. Enact Holdings | AXIS Capital vs. NMI Holdings | AXIS Capital vs. Radian Group |
| Citizens vs. Aflac Incorporated | Citizens vs. Jackson Financial | Citizens vs. Globe Life | Citizens vs. CNO Financial Group |
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 Premium Stories module to follow Macroaxis premium stories from verified contributors across different equity types, categories and coverage scope.
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