Correlation Between AXA SA and TotalEnergies
Can any of the company-specific risk be diversified away by investing in both AXA SA and TotalEnergies 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 TotalEnergies into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between AXA SA and TotalEnergies SE, you can compare the effects of market volatilities on AXA SA and TotalEnergies 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 TotalEnergies. Check out your portfolio center. Please also check ongoing floating volatility patterns of AXA SA and TotalEnergies.
Diversification Opportunities for AXA SA and TotalEnergies
0.5 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between AXA and TotalEnergies is 0.5. Overlapping area represents the amount of risk that can be diversified away by holding AXA SA and TotalEnergies SE in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on TotalEnergies SE 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 TotalEnergies. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of TotalEnergies SE has no effect on the direction of AXA SA i.e., AXA SA and TotalEnergies go up and down completely randomly.
Pair Corralation between AXA SA and TotalEnergies
Assuming the 90 days horizon AXA SA is expected to generate 0.89 times more return on investment than TotalEnergies. However, AXA SA is 1.12 times less risky than TotalEnergies. It trades about 0.07 of its potential returns per unit of risk. TotalEnergies SE is currently generating about 0.01 per unit of risk. If you would invest 2,518 in AXA SA on November 2, 2024 and sell it today you would earn a total of 1,151 from holding AXA SA or generate 45.71% 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. TotalEnergies SE
Performance |
| Timeline |
| AXA SA |
| TotalEnergies SE |
AXA SA and TotalEnergies Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with AXA SA and TotalEnergies
The main advantage of trading using opposite AXA SA and TotalEnergies positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if AXA SA position performs unexpectedly, TotalEnergies 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 TotalEnergies will offset losses from the drop in TotalEnergies' 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 |
| TotalEnergies vs. Air Liquide SA | TotalEnergies vs. Engie SA | TotalEnergies vs. Sanofi SA | TotalEnergies vs. AXA 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 ETF Categories module to list of ETF categories grouped based on various criteria, such as the investment strategy or type of investments.
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