Correlation Between AXIS Capital and IShares
Can any of the company-specific risk be diversified away by investing in both AXIS Capital and IShares 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 IShares 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 IShares, you can compare the effects of market volatilities on AXIS Capital and IShares 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 IShares. Check out your portfolio center. Please also check ongoing floating volatility patterns of AXIS Capital and IShares.
Diversification Opportunities for AXIS Capital and IShares
0.72 | Correlation Coefficient |
Poor diversification
The 3 months correlation between AXIS and IShares is 0.72. Overlapping area represents the amount of risk that can be diversified away by holding AXIS Capital Holdings and IShares in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on IShares 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 IShares. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of IShares has no effect on the direction of AXIS Capital i.e., AXIS Capital and IShares go up and down completely randomly.
Pair Corralation between AXIS Capital and IShares
Considering the 90-day investment horizon AXIS Capital is expected to generate 91.96 times less return on investment than IShares. But when comparing it to its historical volatility, AXIS Capital Holdings is 110.79 times less risky than IShares. It trades about 0.17 of its potential returns per unit of risk. IShares is currently generating about 0.14 of returns per unit of risk over similar time horizon. If you would invest 1,520 in IShares on September 3, 2024 and sell it today you would earn a total of 25,839 from holding IShares or generate 1699.93% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 39.2% |
| Values | Daily Returns |
AXIS Capital Holdings vs. IShares
Performance |
| Timeline |
| AXIS Capital Holdings |
| IShares |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
AXIS Capital and IShares Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with AXIS Capital and IShares
The main advantage of trading using opposite AXIS Capital and IShares positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if AXIS Capital position performs unexpectedly, IShares 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 IShares will offset losses from the drop in IShares' long position.| AXIS Capital vs. Enact Holdings | AXIS Capital vs. MGIC Investment Corp | AXIS Capital vs. Employers Holdings |
| IShares vs. AXIS Capital Holdings | IShares vs. Renaissancere Holdings | IShares vs. Aspira Womens Health | IShares vs. Prenetics Global |
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 Price Transformation module to use Price Transformation models to analyze the depth of different equity instruments across global markets.
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