Correlation Between Old Republic and Axa Equitable
Can any of the company-specific risk be diversified away by investing in both Old Republic 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 Old Republic and Axa Equitable into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Old Republic International and Axa Equitable Holdings, you can compare the effects of market volatilities on Old Republic 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 Old Republic with a short position of Axa Equitable. Check out your portfolio center. Please also check ongoing floating volatility patterns of Old Republic and Axa Equitable.
Diversification Opportunities for Old Republic and Axa Equitable
0.71 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Old and Axa is 0.71. Overlapping area represents the amount of risk that can be diversified away by holding Old Republic International 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 Old Republic 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 Old Republic International 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 Old Republic i.e., Old Republic and Axa Equitable go up and down completely randomly.
Pair Corralation between Old Republic and Axa Equitable
Considering the 90-day investment horizon Old Republic is expected to generate 1.19 times less return on investment than Axa Equitable. But when comparing it to its historical volatility, Old Republic International is 1.66 times less risky than Axa Equitable. It trades about 0.09 of its potential returns per unit of risk. Axa Equitable Holdings is currently generating about 0.06 of returns per unit of risk over similar time horizon. If you would invest 3,027 in Axa Equitable Holdings on August 27, 2024 and sell it today you would earn a total of 1,874 from holding Axa Equitable Holdings or generate 61.91% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Old Republic International vs. Axa Equitable Holdings
Performance |
| Timeline |
| Old Republic Interna |
| Axa Equitable Holdings |
Old Republic and Axa Equitable Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Old Republic and Axa Equitable
The main advantage of trading using opposite Old Republic and Axa Equitable positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Old Republic 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.| Old Republic vs. Fiverr International | Old Republic vs. Pinterest | Old Republic vs. Upstart Holdings | Old Republic vs. Fastly Inc |
| 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 Investing Opportunities module to build portfolios using our predefined set of ideas and optimize them against your investing preferences.
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