Correlation Between AXA SA and Abionyx Pharma

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

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

Diversification Opportunities for AXA SA and Abionyx Pharma

-0.43

Correlation Coefficient

AXA SA  Abionyx Pharma

Very good diversification

The 3 months correlation between AXA and Abionyx is -0.43. Overlapping area represents the amount of risk that can be diversified away by holding AXA SA and Abionyx Pharma SA in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Abionyx Pharma SA 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 Abionyx Pharma. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Abionyx Pharma SA has no effect on the direction of AXA SA i.e., AXA SA and Abionyx Pharma go up and down completely randomly.

Pair Corralation between AXA SA and Abionyx Pharma

Assuming the 90 days horizon AXA SA is expected to generate 36.7 times less return on investment than Abionyx Pharma. But when comparing it to its historical volatility, AXA SA is 2.27 times less risky than Abionyx Pharma. It trades about 0.0 of its potential returns per unit of risk. Abionyx Pharma SA is currently generating about 0.06 of returns per unit of risk over similar time horizon. If you would invest  124.00  in Abionyx Pharma SA on October 22, 2024 and sell it today you would earn a total of  9.00  from holding Abionyx Pharma SA or generate 7.26% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Very Weak
Accuracy	98.41%
Values	Daily Returns

AXA SA  vs.  Abionyx Pharma SA

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. Despite somewhat strong basic indicators, AXA SA is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

Abionyx Pharma SA

Risk-Adjusted Performance

4 of 100

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in Abionyx Pharma SA are ranked lower than 4 (%) of all global equities and portfolios over the last 90 days. Despite somewhat weak basic indicators, Abionyx Pharma may actually be approaching a critical reversion point that can send shares even higher in February 2025.

Pair Trading with AXA SA and Abionyx Pharma

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

The idea behind AXA SA and Abionyx Pharma 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.

Check out your portfolio center.

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 Portfolio Volatility module to check portfolio volatility and analyze historical return density to properly model market risk.