Correlation Between Caixabank Seleccin and AXA World

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

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

Diversification Opportunities for Caixabank Seleccin and AXA World

-0.11

Correlation Coefficient

Caixabank Seleccin  AXA World

Good diversification

The 3 months correlation between Caixabank and AXA is -0.11. Overlapping area represents the amount of risk that can be diversified away by holding Caixabank Seleccin Tendencias 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 Caixabank Seleccin 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 Caixabank Seleccin Tendencias 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 Caixabank Seleccin i.e., Caixabank Seleccin and AXA World go up and down completely randomly.

Pair Corralation between Caixabank Seleccin and AXA World

Assuming the 90 days trading horizon Caixabank Seleccin Tendencias is expected to under-perform the AXA World. In addition to that, Caixabank Seleccin is 1.21 times more volatile than AXA World Funds. It trades about -0.34 of its total potential returns per unit of risk. AXA World Funds is currently generating about -0.27 per unit of volatility. If you would invest  21,119  in AXA World Funds on October 5, 2024 and sell it today you would lose (486.00) from holding AXA World Funds or give up 2.3% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Insignificant
Accuracy	94.12%
Values	Daily Returns

Caixabank Seleccin Tendencias  vs.  AXA World Funds

Caixabank Seleccin

Risk-Adjusted Performance

0 of 100

OK

Over the last 90 days Caixabank Seleccin Tendencias has generated negative risk-adjusted returns adding no value to fund investors. In spite of fairly strong basic indicators, Caixabank Seleccin is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

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 newest stock price disturbance, may contribute to mid-run losses for the stockholders.

Pair Trading with Caixabank Seleccin and AXA World

The main advantage of trading using opposite Caixabank Seleccin and AXA World positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Caixabank Seleccin 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 Caixabank Seleccin Tendencias 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 Technical Analysis module to check basic technical indicators and analysis based on most latest market data.