Correlation Between AXA SA and Carrefour
Can any of the company-specific risk be diversified away by investing in both AXA SA and Carrefour 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 Carrefour into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between AXA SA and Carrefour SA, you can compare the effects of market volatilities on AXA SA and Carrefour 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 Carrefour. Check out your portfolio center. Please also check ongoing floating volatility patterns of AXA SA and Carrefour.
Diversification Opportunities for AXA SA and Carrefour
Very weak diversification
The 3 months correlation between AXA and Carrefour is 0.57. Overlapping area represents the amount of risk that can be diversified away by holding AXA SA and Carrefour SA in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Carrefour SA 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 Carrefour. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Carrefour SA has no effect on the direction of AXA SA i.e., AXA SA and Carrefour go up and down completely randomly.
Pair Corralation between AXA SA and Carrefour
Assuming the 90 days horizon AXA SA is expected to under-perform the Carrefour. In addition to that, AXA SA is 1.15 times more volatile than Carrefour SA. It trades about -0.18 of its total potential returns per unit of risk. Carrefour SA is currently generating about -0.04 per unit of volatility. If you would invest 1,460 in Carrefour SA on August 28, 2024 and sell it today you would lose (12.00) from holding Carrefour SA or give up 0.82% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
AXA SA vs. Carrefour SA
Performance |
| Timeline |
| AXA SA |
| Carrefour SA |
AXA SA and Carrefour Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with AXA SA and Carrefour
The main advantage of trading using opposite AXA SA and Carrefour positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if AXA SA position performs unexpectedly, Carrefour 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 Carrefour will offset losses from the drop in Carrefour'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 |
| Carrefour vs. Lagardere SCA | Carrefour vs. Mtropole Tlvision SA | Carrefour vs. Mercialys SA | Carrefour vs. Nexity |
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 Positions Ratings module to determine portfolio positions ratings based on digital equity recommendations. Macroaxis instant position ratings are based on combination of fundamental analysis and risk-adjusted market performance.
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