Correlation Between AXA SA and Fiducial Office

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

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

Diversification Opportunities for AXA SA and Fiducial Office

-0.55

Correlation Coefficient

AXA SA  Fiducial Office

Excellent diversification

The 3 months correlation between AXA and Fiducial is -0.55. Overlapping area represents the amount of risk that can be diversified away by holding AXA SA and Fiducial Office Solutions in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Fiducial Office Solutions 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 Fiducial Office. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Fiducial Office Solutions has no effect on the direction of AXA SA i.e., AXA SA and Fiducial Office go up and down completely randomly.

Pair Corralation between AXA SA and Fiducial Office

Assuming the 90 days horizon AXA SA is expected to under-perform the Fiducial Office. In addition to that, AXA SA is 4.06 times more volatile than Fiducial Office Solutions. It trades about -0.08 of its total potential returns per unit of risk. Fiducial Office Solutions is currently generating about 0.04 per unit of volatility. If you would invest  2,780  in Fiducial Office Solutions on September 3, 2024 and sell it today you would earn a total of  20.00  from holding Fiducial Office Solutions or generate 0.72% return on investment over 90 days.

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

AXA SA  vs.  Fiducial Office Solutions

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.

Fiducial Office Solutions

Risk-Adjusted Performance

3 of 100

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in Fiducial Office Solutions are ranked lower than 3 (%) of all global equities and portfolios over the last 90 days. Despite somewhat strong basic indicators, Fiducial Office is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

Pair Trading with AXA SA and Fiducial Office

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

The idea behind AXA SA and Fiducial Office Solutions 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 Options Analysis module to analyze and evaluate options and option chains as a potential hedge for your portfolios.