Correlation Between NEW MILLENNIUM and AXA SA

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

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

Diversification Opportunities for NEW MILLENNIUM and AXA SA

-0.82

Correlation Coefficient

NEW MILLENNIUM  AXA SA

Pay attention - limited upside

The 3 months correlation between NEW and AXA is -0.82. Overlapping area represents the amount of risk that can be diversified away by holding NEW MILLENNIUM IRON and AXA SA in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on AXA SA and NEW MILLENNIUM 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 NEW MILLENNIUM IRON 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 NEW MILLENNIUM i.e., NEW MILLENNIUM and AXA SA go up and down completely randomly.

Pair Corralation between NEW MILLENNIUM and AXA SA

Assuming the 90 days trading horizon NEW MILLENNIUM IRON is expected to under-perform the AXA SA. In addition to that, NEW MILLENNIUM is 1.92 times more volatile than AXA SA. It trades about -0.08 of its total potential returns per unit of risk. AXA SA is currently generating about 0.24 per unit of volatility. If you would invest  3,377  in AXA SA on December 19, 2024 and sell it today you would earn a total of  616.00  from holding AXA SA or generate 18.24% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Significant
Accuracy	100.0%
Values	Daily Returns

NEW MILLENNIUM IRON  vs.  AXA SA

NEW MILLENNIUM IRON

Risk-Adjusted Performance

Very Weak

Over the last 90 days NEW MILLENNIUM IRON has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of latest uncertain performance, the Stock's basic indicators remain sound and the latest tumult on Wall Street may also be a sign of longer-term gains for the firm shareholders.

AXA SA

Risk-Adjusted Performance

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in AXA SA are ranked lower than 19 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively fragile basic indicators, AXA SA unveiled solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with NEW MILLENNIUM and AXA SA

The main advantage of trading using opposite NEW MILLENNIUM and AXA SA positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if NEW MILLENNIUM 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.

The idea behind NEW MILLENNIUM IRON and AXA SA 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 Competition Analyzer module to analyze and compare many basic indicators for a group of related or unrelated entities.