Correlation Between AXA SA and Ipsos SA
Can any of the company-specific risk be diversified away by investing in both AXA SA and Ipsos 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 Ipsos 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 Ipsos SA, you can compare the effects of market volatilities on AXA SA and Ipsos 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 Ipsos SA. Check out your portfolio center. Please also check ongoing floating volatility patterns of AXA SA and Ipsos SA.
Diversification Opportunities for AXA SA and Ipsos SA
Very weak diversification
The 3 months correlation between AXA and Ipsos is 0.52. Overlapping area represents the amount of risk that can be diversified away by holding AXA SA and Ipsos SA in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Ipsos 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 Ipsos SA. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Ipsos SA has no effect on the direction of AXA SA i.e., AXA SA and Ipsos SA go up and down completely randomly.
Pair Corralation between AXA SA and Ipsos SA
Assuming the 90 days horizon AXA SA is expected to generate 0.85 times more return on investment than Ipsos SA. However, AXA SA is 1.17 times less risky than Ipsos SA. It trades about 0.3 of its potential returns per unit of risk. Ipsos SA is currently generating about -0.03 per unit of risk. If you would invest 3,445 in AXA SA on November 5, 2024 and sell it today you would earn a total of 220.00 from holding AXA SA or generate 6.39% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
AXA SA vs. Ipsos SA
Performance |
| Timeline |
| AXA SA |
| Ipsos SA |
AXA SA and Ipsos SA Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with AXA SA and Ipsos SA
The main advantage of trading using opposite AXA SA and Ipsos SA positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if AXA SA position performs unexpectedly, Ipsos 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 Ipsos SA will offset losses from the drop in Ipsos 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 |
| Ipsos SA vs. Mtropole Tlvision SA | Ipsos SA vs. Alten SA | Ipsos SA vs. Publicis Groupe SA | Ipsos SA vs. Imerys SA |
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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