Correlation Between AXA SA and ADRIATIC METALS

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

By analyzing existing cross correlation between AXA SA and ADRIATIC METALS LS 013355, you can compare the effects of market volatilities on AXA SA and ADRIATIC METALS 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 AXA SA with a short position of ADRIATIC METALS. Check out your portfolio center. Please also check ongoing floating volatility patterns of AXA SA and ADRIATIC METALS.

Diversification Opportunities for AXA SA and ADRIATIC METALS

0.02

Correlation Coefficient

AXA SA  ADRIATIC METALS

Significant diversification

The 3 months correlation between AXA and ADRIATIC is 0.02. Overlapping area represents the amount of risk that can be diversified away by holding AXA SA and ADRIATIC METALS LS 013355 in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on ADRIATIC METALS LS and AXA SA 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 AXA SA are associated (or correlated) with ADRIATIC METALS. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of ADRIATIC METALS LS has no effect on the direction of AXA SA i.e., AXA SA and ADRIATIC METALS go up and down completely randomly.

Pair Corralation between AXA SA and ADRIATIC METALS

Assuming the 90 days trading horizon AXA SA is expected to generate 0.31 times more return on investment than ADRIATIC METALS. However, AXA SA is 3.25 times less risky than ADRIATIC METALS. It trades about 0.12 of its potential returns per unit of risk. ADRIATIC METALS LS 013355 is currently generating about -0.12 per unit of risk. If you would invest  3,414  in AXA SA on October 10, 2024 and sell it today you would earn a total of  61.00  from holding AXA SA or generate 1.79% return on investment over 90 days.

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

AXA SA  vs.  ADRIATIC METALS LS 013355

AXA SA

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days AXA SA has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of very healthy basic indicators, AXA SA is not utilizing all of its potentials. The current stock price disarray, may contribute to short-term losses for the investors.

ADRIATIC METALS LS

Risk-Adjusted Performance

3 of 100

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in ADRIATIC METALS LS 013355 are ranked lower than 3 (%) of all global equities and portfolios over the last 90 days. Despite nearly uncertain basic indicators, ADRIATIC METALS may actually be approaching a critical reversion point that can send shares even higher in February 2025.

Pair Trading with AXA SA and ADRIATIC METALS

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

The idea behind AXA SA and ADRIATIC METALS LS 013355 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 Sign In To Macroaxis module to sign in to explore Macroaxis' wealth optimization platform and fintech modules.