Correlation Between CM AM and AXA World

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

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

Diversification Opportunities for CM AM and AXA World

-0.25

Correlation Coefficient

CM AM  AXA World

Very good diversification

The 3 months correlation between 0P0001F96C and AXA is -0.25. Overlapping area represents the amount of risk that can be diversified away by holding CM AM Monplus NE 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 CM AM 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 CM AM Monplus NE 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 CM AM i.e., CM AM and AXA World go up and down completely randomly.

Pair Corralation between CM AM and AXA World

Assuming the 90 days trading horizon CM AM is expected to generate 17.83 times less return on investment than AXA World. But when comparing it to its historical volatility, CM AM Monplus NE is 34.42 times less risky than AXA World. It trades about 1.29 of its potential returns per unit of risk. AXA World Funds is currently generating about 0.67 of returns per unit of risk over similar time horizon. If you would invest  20,463  in AXA World Funds on October 27, 2024 and sell it today you would earn a total of  854.00  from holding AXA World Funds or generate 4.17% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Insignificant
Accuracy	90.0%
Values	Daily Returns

CM AM Monplus NE  vs.  AXA World Funds

CM AM Monplus

Risk-Adjusted Performance

96 of 100

Market Crasher

Compared to the overall equity markets, risk-adjusted returns on investments in CM AM Monplus NE are ranked lower than 96 (%) of all funds and portfolios of funds over the last 90 days. Despite nearly stable basic indicators, CM AM is not utilizing all of its potentials. The current stock price disturbance, may contribute to mid-run losses for the stockholders.

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. In spite of comparatively stable basic indicators, AXA World is not utilizing all of its potentials. The recent stock price uproar, may contribute to short-horizon losses for the private investors.

Pair Trading with CM AM and AXA World

The main advantage of trading using opposite CM AM and AXA World positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if CM AM 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 CM AM Monplus NE 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 Price Exposure Probability module to analyze equity upside and downside potential for a given time horizon across multiple markets.