Correlation Between Axa Equitable and Enstar Group
Can any of the company-specific risk be diversified away by investing in both Axa Equitable and Enstar Group 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 Equitable and Enstar Group into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Axa Equitable Holdings and Enstar Group Limited, you can compare the effects of market volatilities on Axa Equitable and Enstar Group 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 Equitable with a short position of Enstar Group. Check out your portfolio center. Please also check ongoing floating volatility patterns of Axa Equitable and Enstar Group.
Diversification Opportunities for Axa Equitable and Enstar Group
0.58 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Axa and Enstar is 0.58. Overlapping area represents the amount of risk that can be diversified away by holding Axa Equitable Holdings and Enstar Group Limited in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Enstar Group Limited and Axa Equitable 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 Equitable Holdings are associated (or correlated) with Enstar Group. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Enstar Group Limited has no effect on the direction of Axa Equitable i.e., Axa Equitable and Enstar Group go up and down completely randomly.
Pair Corralation between Axa Equitable and Enstar Group
Considering the 90-day investment horizon Axa Equitable Holdings is expected to generate 11.53 times more return on investment than Enstar Group. However, Axa Equitable is 11.53 times more volatile than Enstar Group Limited. It trades about 0.06 of its potential returns per unit of risk. Enstar Group Limited is currently generating about -0.04 per unit of risk. If you would invest 4,544 in Axa Equitable Holdings on August 24, 2024 and sell it today you would earn a total of 136.00 from holding Axa Equitable Holdings or generate 2.99% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Axa Equitable Holdings vs. Enstar Group Limited
Performance |
| Timeline |
| Axa Equitable Holdings |
| Enstar Group Limited |
Axa Equitable and Enstar Group Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Axa Equitable and Enstar Group
The main advantage of trading using opposite Axa Equitable and Enstar Group positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Axa Equitable position performs unexpectedly, Enstar Group 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 Enstar Group will offset losses from the drop in Enstar Group's long position.| Axa Equitable vs. American International Group | Axa Equitable vs. Arch Capital Group | Axa Equitable vs. Old Republic International | Axa Equitable vs. Sun Life Financial |
| Enstar Group vs. Global Indemnity PLC | Enstar Group vs. Erie Indemnity | Enstar Group vs. AMERISAFE | Enstar Group vs. Diamond Hill Investment |
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 Bond Analysis module to evaluate and analyze corporate bonds as a potential investment for your portfolios..
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