Correlation Between Axa Equitable and Global Indemnity
Can any of the company-specific risk be diversified away by investing in both Axa Equitable and Global Indemnity 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 Global Indemnity 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 Global Indemnity PLC, you can compare the effects of market volatilities on Axa Equitable and Global Indemnity 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 Global Indemnity. Check out your portfolio center. Please also check ongoing floating volatility patterns of Axa Equitable and Global Indemnity.
Diversification Opportunities for Axa Equitable and Global Indemnity
0.4 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Axa and Global is 0.4. Overlapping area represents the amount of risk that can be diversified away by holding Axa Equitable Holdings and Global Indemnity PLC in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Global Indemnity PLC 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 Global Indemnity. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Global Indemnity PLC has no effect on the direction of Axa Equitable i.e., Axa Equitable and Global Indemnity go up and down completely randomly.
Pair Corralation between Axa Equitable and Global Indemnity
Considering the 90-day investment horizon Axa Equitable Holdings is expected to generate 3.35 times more return on investment than Global Indemnity. However, Axa Equitable is 3.35 times more volatile than Global Indemnity PLC. It trades about 0.11 of its potential returns per unit of risk. Global Indemnity PLC is currently generating about 0.16 per unit of risk. If you would invest 4,585 in Axa Equitable Holdings on August 28, 2024 and sell it today you would earn a total of 316.00 from holding Axa Equitable Holdings or generate 6.89% 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. Global Indemnity PLC
Performance |
| Timeline |
| Axa Equitable Holdings |
| Global Indemnity PLC |
Axa Equitable and Global Indemnity Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Axa Equitable and Global Indemnity
The main advantage of trading using opposite Axa Equitable and Global Indemnity positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Axa Equitable position performs unexpectedly, Global Indemnity 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 Global Indemnity will offset losses from the drop in Global Indemnity'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 |
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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 Pattern Recognition module to use different Pattern Recognition models to time the market across multiple global exchanges.
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