Correlation Between Tyson Foods and AXA SA
Can any of the company-specific risk be diversified away by investing in both Tyson Foods 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 Tyson Foods and AXA SA into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Tyson Foods and AXA SA, you can compare the effects of market volatilities on Tyson Foods 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 Tyson Foods with a short position of AXA SA. Check out your portfolio center. Please also check ongoing floating volatility patterns of Tyson Foods and AXA SA.
Diversification Opportunities for Tyson Foods and AXA SA
-0.57 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Tyson and AXA is -0.57. Overlapping area represents the amount of risk that can be diversified away by holding Tyson Foods and AXA SA in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on AXA SA and Tyson Foods 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 Tyson Foods 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 Tyson Foods i.e., Tyson Foods and AXA SA go up and down completely randomly.
Pair Corralation between Tyson Foods and AXA SA
Assuming the 90 days trading horizon Tyson Foods is expected to generate 1.53 times more return on investment than AXA SA. However, Tyson Foods is 1.53 times more volatile than AXA SA. It trades about 0.06 of its potential returns per unit of risk. AXA SA is currently generating about -0.06 per unit of risk. If you would invest 5,767 in Tyson Foods on September 4, 2024 and sell it today you would earn a total of 369.00 from holding Tyson Foods or generate 6.4% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Tyson Foods vs. AXA SA
Performance |
| Timeline |
| Tyson Foods |
| AXA SA |
Tyson Foods and AXA SA Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Tyson Foods and AXA SA
The main advantage of trading using opposite Tyson Foods and AXA SA positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Tyson Foods 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.| Tyson Foods vs. BII Railway Transportation | Tyson Foods vs. GOLD ROAD RES | Tyson Foods vs. MAGNUM MINING EXP | Tyson Foods vs. Fukuyama Transporting Co |
| AXA SA vs. Ribbon Communications | AXA SA vs. INDOFOOD AGRI RES | AXA SA vs. Food Life Companies | AXA SA vs. Tyson Foods |
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 Equity Forecasting module to use basic forecasting models to generate price predictions and determine price momentum.
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