Correlation Between Flex and Axa Equitable
Can any of the company-specific risk be diversified away by investing in both Flex and Axa Equitable 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 Flex and Axa Equitable into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Flex and Axa Equitable Holdings, you can compare the effects of market volatilities on Flex and Axa Equitable 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 Flex with a short position of Axa Equitable. Check out your portfolio center. Please also check ongoing floating volatility patterns of Flex and Axa Equitable.
Diversification Opportunities for Flex and Axa Equitable
0.59 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Flex and Axa is 0.59. Overlapping area represents the amount of risk that can be diversified away by holding Flex and Axa Equitable Holdings in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Axa Equitable Holdings and Flex 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 Flex are associated (or correlated) with Axa Equitable. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Axa Equitable Holdings has no effect on the direction of Flex i.e., Flex and Axa Equitable go up and down completely randomly.
Pair Corralation between Flex and Axa Equitable
Given the investment horizon of 90 days Flex is expected to generate 2.08 times more return on investment than Axa Equitable. However, Flex is 2.08 times more volatile than Axa Equitable Holdings. It trades about 0.08 of its potential returns per unit of risk. Axa Equitable Holdings is currently generating about 0.07 per unit of risk. If you would invest 1,112 in Flex on November 2, 2024 and sell it today you would earn a total of 3,096 from holding Flex or generate 278.42% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 99.8% |
| Values | Daily Returns |
Flex vs. Axa Equitable Holdings
Performance |
| Timeline |
| Flex |
| Axa Equitable Holdings |
Flex and Axa Equitable Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Flex and Axa Equitable
The main advantage of trading using opposite Flex and Axa Equitable positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Flex position performs unexpectedly, Axa Equitable 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 Axa Equitable will offset losses from the drop in Axa Equitable's long position.The idea behind Flex and Axa Equitable Holdings pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.| Axa Equitable vs. American International Group | Axa Equitable vs. Arch Capital Group | Axa Equitable vs. Old Republic International | Axa Equitable vs. Sun Life Financial |
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 Earnings Calls module to check upcoming earnings announcements updated hourly across public exchanges.
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