Correlation Between AXA SA and Compagnie
Can any of the company-specific risk be diversified away by investing in both AXA SA and Compagnie 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 Compagnie into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between AXA SA and Compagnie Du Mont Blanc, you can compare the effects of market volatilities on AXA SA and Compagnie 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 Compagnie. Check out your portfolio center. Please also check ongoing floating volatility patterns of AXA SA and Compagnie.
Diversification Opportunities for AXA SA and Compagnie
Very weak diversification
The 3 months correlation between AXA and Compagnie is 0.56. Overlapping area represents the amount of risk that can be diversified away by holding AXA SA and Compagnie Du Mont Blanc in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Compagnie Du Mont 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 Compagnie. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Compagnie Du Mont has no effect on the direction of AXA SA i.e., AXA SA and Compagnie go up and down completely randomly.
Pair Corralation between AXA SA and Compagnie
Assuming the 90 days horizon AXA SA is expected to generate 0.81 times more return on investment than Compagnie. However, AXA SA is 1.24 times less risky than Compagnie. It trades about 0.08 of its potential returns per unit of risk. Compagnie Du Mont Blanc is currently generating about 0.04 per unit of risk. If you would invest 2,499 in AXA SA on January 15, 2025 and sell it today you would earn a total of 1,311 from holding AXA SA or generate 52.46% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 98.48% |
| Values | Daily Returns |
AXA SA vs. Compagnie Du Mont Blanc
Performance |
| Timeline |
| AXA SA |
| Compagnie Du Mont |
AXA SA and Compagnie Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with AXA SA and Compagnie
The main advantage of trading using opposite AXA SA and Compagnie positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if AXA SA position performs unexpectedly, Compagnie 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 Compagnie will offset losses from the drop in Compagnie'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 |
| Compagnie vs. Compagnie des Alpes | Compagnie vs. Groupe Partouche SA | Compagnie vs. IDI SCA | Compagnie vs. Linedata Services 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 Alpha Finder module to use alpha and beta coefficients to find investment opportunities after accounting for the risk.
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