Correlation Between BlackRock Global and AXA World

Can any of the company-specific risk be diversified away by investing in both BlackRock Global and AXA World 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 BlackRock Global and AXA World into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between BlackRock Global Funds and AXA World Funds, you can compare the effects of market volatilities on BlackRock Global and AXA World 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 BlackRock Global with a short position of AXA World. Check out your portfolio center. Please also check ongoing floating volatility patterns of BlackRock Global and AXA World.

Diversification Opportunities for BlackRock Global and AXA World

0.75

Correlation Coefficient

BlackRock Global  AXA World

Poor diversification

The 3 months correlation between BlackRock and AXA is 0.75. Overlapping area represents the amount of risk that can be diversified away by holding BlackRock Global Funds and AXA World Funds in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on AXA World Funds and BlackRock Global 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 BlackRock Global Funds are associated (or correlated) with AXA World. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of AXA World Funds has no effect on the direction of BlackRock Global i.e., BlackRock Global and AXA World go up and down completely randomly.

Pair Corralation between BlackRock Global and AXA World

Assuming the 90 days trading horizon BlackRock Global Funds is expected to generate 2.01 times more return on investment than AXA World. However, BlackRock Global is 2.01 times more volatile than AXA World Funds. It trades about 0.05 of its potential returns per unit of risk. AXA World Funds is currently generating about 0.03 per unit of risk. If you would invest  3,827  in BlackRock Global Funds on September 22, 2024 and sell it today you would earn a total of  1,057  from holding BlackRock Global Funds or generate 27.62% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Significant
Accuracy	98.62%
Values	Daily Returns

BlackRock Global Funds  vs.  AXA World Funds

BlackRock Global Funds

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days BlackRock Global Funds has generated negative risk-adjusted returns adding no value to fund investors. Even with relatively steady basic indicators, BlackRock Global is not utilizing all of its potentials. The current stock price chaos, may contribute to medium-term losses for the stakeholders.

AXA World Funds

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days AXA World Funds has generated negative risk-adjusted returns adding no value to fund investors. Despite nearly stable basic indicators, AXA World is not utilizing all of its potentials. The current stock price disturbance, may contribute to mid-run losses for the stockholders.

Pair Trading with BlackRock Global and AXA World

The main advantage of trading using opposite BlackRock Global and AXA World positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if BlackRock Global position performs unexpectedly, AXA World 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 World will offset losses from the drop in AXA World's long position.

The idea behind BlackRock Global Funds and AXA World Funds pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.

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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 Stock Tickers module to use high-impact, comprehensive, and customizable stock tickers that can be easily integrated to any websites.