Correlation Between AXA SA and Equitable Holdings

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

By analyzing existing cross correlation between AXA SA and Equitable Holdings, you can compare the effects of market volatilities on AXA SA and Equitable Holdings 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 Equitable Holdings. Check out your portfolio center. Please also check ongoing floating volatility patterns of AXA SA and Equitable Holdings.

Diversification Opportunities for AXA SA and Equitable Holdings

0.25

Correlation Coefficient

AXA SA  Equitable Holdings

Modest diversification

The 3 months correlation between AXA and Equitable is 0.25. Overlapping area represents the amount of risk that can be diversified away by holding AXA SA and Equitable Holdings in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Equitable Holdings 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 Equitable Holdings. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Equitable Holdings has no effect on the direction of AXA SA i.e., AXA SA and Equitable Holdings go up and down completely randomly.

Pair Corralation between AXA SA and Equitable Holdings

Assuming the 90 days trading horizon AXA SA is expected to generate 1.07 times more return on investment than Equitable Holdings. However, AXA SA is 1.07 times more volatile than Equitable Holdings. It trades about 0.15 of its potential returns per unit of risk. Equitable Holdings is currently generating about 0.08 per unit of risk. If you would invest  3,340  in AXA SA on December 29, 2024 and sell it today you would earn a total of  640.00  from holding AXA SA or generate 19.16% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Very Weak
Accuracy	98.44%
Values	Daily Returns

AXA SA  vs.  Equitable Holdings

AXA SA

Risk-Adjusted Performance

Good

Compared to the overall equity markets, risk-adjusted returns on investments in AXA SA are ranked lower than 11 (%) of all global equities and portfolios over the last 90 days. Despite nearly fragile basic indicators, AXA SA reported solid returns over the last few months and may actually be approaching a breakup point.

Equitable Holdings

Risk-Adjusted Performance

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in Equitable Holdings are ranked lower than 6 (%) of all global equities and portfolios over the last 90 days. Despite nearly uncertain basic indicators, Equitable Holdings may actually be approaching a critical reversion point that can send shares even higher in April 2025.

Pair Trading with AXA SA and Equitable Holdings

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

The idea behind AXA SA and Equitable Holdings 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 Earnings Calls module to check upcoming earnings announcements updated hourly across public exchanges.