Correlation Between IA Financial and AXA SA
Can any of the company-specific risk be diversified away by investing in both IA Financial and AXA SA 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 IA Financial and AXA SA into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between iA Financial and AXA SA, you can compare the effects of market volatilities on IA Financial and AXA SA 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 IA Financial with a short position of AXA SA. Check out your portfolio center. Please also check ongoing floating volatility patterns of IA Financial and AXA SA.
Diversification Opportunities for IA Financial and AXA SA
-0.76 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between IAFNF and AXA is -0.76. Overlapping area represents the amount of risk that can be diversified away by holding iA Financial and AXA SA in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on AXA SA and IA Financial 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 iA Financial are associated (or correlated) with AXA SA. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of AXA SA has no effect on the direction of IA Financial i.e., IA Financial and AXA SA go up and down completely randomly.
Pair Corralation between IA Financial and AXA SA
Assuming the 90 days horizon IA Financial is expected to generate 1.37 times less return on investment than AXA SA. But when comparing it to its historical volatility, iA Financial is 2.86 times less risky than AXA SA. It trades about 0.08 of its potential returns per unit of risk. AXA SA is currently generating about 0.04 of returns per unit of risk over similar time horizon. If you would invest 2,522 in AXA SA on September 2, 2024 and sell it today you would earn a total of 977.00 from holding AXA SA or generate 38.74% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 91.73% |
| Values | Daily Returns |
iA Financial vs. AXA SA
Performance |
| Timeline |
| iA Financial |
| AXA SA |
IA Financial and AXA SA Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with IA Financial and AXA SA
The main advantage of trading using opposite IA Financial and AXA SA positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if IA Financial position performs unexpectedly, AXA SA 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 SA will offset losses from the drop in AXA SA's long position.| IA Financial vs. ageas SANV | IA Financial vs. Athene Holding | IA Financial vs. Sampo OYJ | IA Financial vs. Athene Holding |
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 Volatility Analysis module to get historical volatility and risk analysis based on latest market data.
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