Correlation Between AXA SA and Amatheon Agri

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

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

Diversification Opportunities for AXA SA and Amatheon Agri

0.68

Correlation Coefficient

AXA SA  Amatheon Agri

Poor diversification

The 3 months correlation between AXA and Amatheon is 0.68. Overlapping area represents the amount of risk that can be diversified away by holding AXA SA and Amatheon Agri Holding in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Amatheon Agri Holding 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 Amatheon Agri. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Amatheon Agri Holding has no effect on the direction of AXA SA i.e., AXA SA and Amatheon Agri go up and down completely randomly.

Pair Corralation between AXA SA and Amatheon Agri

Assuming the 90 days horizon AXA SA is expected to generate 0.09 times more return on investment than Amatheon Agri. However, AXA SA is 10.84 times less risky than Amatheon Agri. It trades about 0.08 of its potential returns per unit of risk. Amatheon Agri Holding is currently generating about 0.0 per unit of risk. If you would invest  2,634  in AXA SA on October 4, 2024 and sell it today you would earn a total of  808.00  from holding AXA SA or generate 30.68% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Significant
Accuracy	99.11%
Values	Daily Returns

AXA SA  vs.  Amatheon Agri Holding

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.

Amatheon Agri Holding

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Amatheon Agri Holding has generated negative risk-adjusted returns adding no value to investors with long positions. Even with latest weak performance, the Stock's basic indicators remain invariable and the latest agitation on Wall Street may also be a sign of long-running gains for the enterprise retail investors.

Pair Trading with AXA SA and Amatheon Agri

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

The idea behind AXA SA and Amatheon Agri Holding 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 Performance Analysis module to check effects of mean-variance optimization against your current asset allocation.