Correlation Between Sampo Oyj and AXA SA
Can any of the company-specific risk be diversified away by investing in both Sampo Oyj 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 Sampo Oyj and AXA SA into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Sampo Oyj and AXA SA, you can compare the effects of market volatilities on Sampo Oyj 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 Sampo Oyj with a short position of AXA SA. Check out your portfolio center. Please also check ongoing floating volatility patterns of Sampo Oyj and AXA SA.
Diversification Opportunities for Sampo Oyj and AXA SA
Very weak diversification
The 3 months correlation between Sampo and AXA is 0.58. Overlapping area represents the amount of risk that can be diversified away by holding Sampo Oyj and AXA SA in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on AXA SA and Sampo Oyj 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 Sampo Oyj 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 Sampo Oyj i.e., Sampo Oyj and AXA SA go up and down completely randomly.
Pair Corralation between Sampo Oyj and AXA SA
Assuming the 90 days horizon Sampo Oyj is expected to generate 1.04 times less return on investment than AXA SA. In addition to that, Sampo Oyj is 1.32 times more volatile than AXA SA. It trades about 0.03 of its total potential returns per unit of risk. AXA SA is currently generating about 0.04 per unit of volatility. If you would invest 2,503 in AXA SA on August 24, 2024 and sell it today you would earn a total of 1,048 from holding AXA SA or generate 41.87% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 80.84% |
| Values | Daily Returns |
Sampo Oyj vs. AXA SA
Performance |
| Timeline |
| Sampo Oyj |
| AXA SA |
Sampo Oyj and AXA SA Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Sampo Oyj and AXA SA
The main advantage of trading using opposite Sampo Oyj and AXA SA positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Sampo Oyj 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.| Sampo Oyj vs. Assicurazioni Generali SpA | Sampo Oyj vs. ageas SANV | Sampo Oyj vs. AXA SA | Sampo Oyj vs. Sampo OYJ |
| AXA SA vs. Assicurazioni Generali SpA | AXA SA vs. Athene Holding | AXA SA vs. Athene Holding | AXA SA vs. Arch Capital Group |
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 Premium Stories module to follow Macroaxis premium stories from verified contributors across different equity types, categories and coverage scope.
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