Correlation Between AXA SA and FIPP SA
Can any of the company-specific risk be diversified away by investing in both AXA SA and FIPP SA 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 FIPP SA into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between AXA SA and FIPP SA, you can compare the effects of market volatilities on AXA SA and FIPP SA 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 FIPP SA. Check out your portfolio center. Please also check ongoing floating volatility patterns of AXA SA and FIPP SA.
Diversification Opportunities for AXA SA and FIPP SA
Very good diversification
The 3 months correlation between AXA and FIPP is -0.39. Overlapping area represents the amount of risk that can be diversified away by holding AXA SA and FIPP SA in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on FIPP 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 FIPP SA. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of FIPP SA has no effect on the direction of AXA SA i.e., AXA SA and FIPP SA go up and down completely randomly.
Pair Corralation between AXA SA and FIPP SA
Assuming the 90 days horizon AXA SA is expected to generate 63.54 times less return on investment than FIPP SA. But when comparing it to its historical volatility, AXA SA is 2.62 times less risky than FIPP SA. It trades about 0.0 of its potential returns per unit of risk. FIPP SA is currently generating about 0.07 of returns per unit of risk over similar time horizon. If you would invest 11.00 in FIPP SA on September 1, 2024 and sell it today you would earn a total of 3.00 from holding FIPP SA or generate 27.27% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 99.24% |
| Values | Daily Returns |
AXA SA vs. FIPP SA
Performance |
| Timeline |
| AXA SA |
| FIPP SA |
AXA SA and FIPP SA Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with AXA SA and FIPP SA
The main advantage of trading using opposite AXA SA and FIPP SA positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if AXA SA position performs unexpectedly, FIPP SA 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 FIPP SA will offset losses from the drop in FIPP SA'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 |
| FIPP SA vs. Acanthe Dveloppement | FIPP SA vs. Adomos SA | FIPP SA vs. Foncire Euris SA | FIPP SA vs. Acheter Louer |
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 Analyst Advice module to analyst recommendations and target price estimates broken down by several categories.
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