Correlation Between AXA SA and Air France
Can any of the company-specific risk be diversified away by investing in both AXA SA and Air France 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 Air France into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between AXA SA and Air France KLM SA, you can compare the effects of market volatilities on AXA SA and Air France 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 Air France. Check out your portfolio center. Please also check ongoing floating volatility patterns of AXA SA and Air France.
Diversification Opportunities for AXA SA and Air France
0.63 | Correlation Coefficient |
Poor diversification
The 3 months correlation between AXA and Air is 0.63. Overlapping area represents the amount of risk that can be diversified away by holding AXA SA and Air France KLM SA in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Air France KLM 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 Air France. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Air France KLM has no effect on the direction of AXA SA i.e., AXA SA and Air France go up and down completely randomly.
Pair Corralation between AXA SA and Air France
Assuming the 90 days horizon AXA SA is expected to generate 0.5 times more return on investment than Air France. However, AXA SA is 2.01 times less risky than Air France. It trades about 0.06 of its potential returns per unit of risk. Air France KLM SA is currently generating about -0.03 per unit of risk. If you would invest 2,421 in AXA SA on August 26, 2024 and sell it today you would earn a total of 987.00 from holding AXA SA or generate 40.77% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
AXA SA vs. Air France KLM SA
Performance |
| Timeline |
| AXA SA |
| Air France KLM |
AXA SA and Air France Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with AXA SA and Air France
The main advantage of trading using opposite AXA SA and Air France positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if AXA SA position performs unexpectedly, Air France 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 Air France will offset losses from the drop in Air France's long position.| AXA SA vs. BNP Paribas SA | AXA SA vs. Sanofi SA | AXA SA vs. Credit Agricole SA | AXA SA vs. Societe Generale SA |
| Air France vs. Manitou BF SA | Air France vs. Ossiam Minimum Variance | Air France vs. Granite 3x LVMH | Air France vs. 21Shares Polkadot ETP |
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 Technical Analysis module to check basic technical indicators and analysis based on most latest market data.
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