Correlation Between Swiss Life and AXA SA
Can any of the company-specific risk be diversified away by investing in both Swiss Life 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 Swiss Life and AXA SA into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Swiss Life Holding and AXA SA, you can compare the effects of market volatilities on Swiss Life 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 Swiss Life with a short position of AXA SA. Check out your portfolio center. Please also check ongoing floating volatility patterns of Swiss Life and AXA SA.
Diversification Opportunities for Swiss Life and AXA SA
0.49 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Swiss and AXA is 0.49. Overlapping area represents the amount of risk that can be diversified away by holding Swiss Life Holding and AXA SA in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on AXA SA and Swiss Life 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 Swiss Life Holding 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 Swiss Life i.e., Swiss Life and AXA SA go up and down completely randomly.
Pair Corralation between Swiss Life and AXA SA
Assuming the 90 days horizon Swiss Life Holding is expected to generate 0.69 times more return on investment than AXA SA. However, Swiss Life Holding is 1.45 times less risky than AXA SA. It trades about 0.1 of its potential returns per unit of risk. AXA SA is currently generating about 0.04 per unit of risk. If you would invest 3,080 in Swiss Life Holding on September 3, 2024 and sell it today you would earn a total of 1,066 from holding Swiss Life Holding or generate 34.61% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 91.9% |
| Values | Daily Returns |
Swiss Life Holding vs. AXA SA
Performance |
| Timeline |
| Swiss Life Holding |
| AXA SA |
Swiss Life and AXA SA Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Swiss Life and AXA SA
The main advantage of trading using opposite Swiss Life and AXA SA positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Swiss Life 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.| Swiss Life vs. Zurich Insurance Group | Swiss Life vs. Allianz SE | Swiss Life vs. Swiss Life Holding | Swiss Life vs. Zurich Insurance Group |
| 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 Pattern Recognition module to use different Pattern Recognition models to time the market across multiple global exchanges.
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