Correlation Between Citizens and AXIS Capital
Can any of the company-specific risk be diversified away by investing in both Citizens and AXIS 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 Citizens and AXIS Capital into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Citizens and AXIS Capital Holdings, you can compare the effects of market volatilities on Citizens and AXIS 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 Citizens with a short position of AXIS Capital. Check out your portfolio center. Please also check ongoing floating volatility patterns of Citizens and AXIS Capital.
Diversification Opportunities for Citizens and AXIS Capital
0.55 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Citizens and AXIS is 0.55. Overlapping area represents the amount of risk that can be diversified away by holding Citizens and AXIS Capital Holdings in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on AXIS Capital Holdings and Citizens 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 Citizens are associated (or correlated) with AXIS Capital. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of AXIS Capital Holdings has no effect on the direction of Citizens i.e., Citizens and AXIS Capital go up and down completely randomly.
Pair Corralation between Citizens and AXIS Capital
Considering the 90-day investment horizon Citizens is expected to under-perform the AXIS Capital. In addition to that, Citizens is 2.41 times more volatile than AXIS Capital Holdings. It trades about -0.06 of its total potential returns per unit of risk. AXIS Capital Holdings is currently generating about 0.57 per unit of volatility. If you would invest 7,826 in AXIS Capital Holdings on September 1, 2024 and sell it today you would earn a total of 1,478 from holding AXIS Capital Holdings or generate 18.89% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Citizens vs. AXIS Capital Holdings
Performance |
| Timeline |
| Citizens |
| AXIS Capital Holdings |
Citizens and AXIS Capital Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Citizens and AXIS Capital
The main advantage of trading using opposite Citizens and AXIS Capital positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Citizens position performs unexpectedly, AXIS 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 AXIS Capital will offset losses from the drop in AXIS Capital's long position.| Citizens vs. Aflac Incorporated | Citizens vs. Jackson Financial | Citizens vs. Globe Life | Citizens vs. CNO Financial Group |
| AXIS Capital vs. Assured Guaranty | AXIS Capital vs. Enact Holdings | AXIS Capital vs. NMI Holdings | AXIS Capital vs. Radian 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 Portfolio Dashboard module to portfolio dashboard that provides centralized access to all your investments.
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