Correlation Between Axa Equitable and NN Group

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

By analyzing existing cross correlation between Axa Equitable Holdings and NN Group NV, you can compare the effects of market volatilities on Axa Equitable and NN Group 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 Equitable with a short position of NN Group. Check out your portfolio center. Please also check ongoing floating volatility patterns of Axa Equitable and NN Group.

Diversification Opportunities for Axa Equitable and NN Group

-0.57

Correlation Coefficient

Axa Equitable  NN Group

Excellent diversification

The 3 months correlation between Axa and NNGRY is -0.57. Overlapping area represents the amount of risk that can be diversified away by holding Axa Equitable Holdings and NN Group NV in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on NN Group NV and Axa Equitable 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 Equitable Holdings are associated (or correlated) with NN Group. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of NN Group NV has no effect on the direction of Axa Equitable i.e., Axa Equitable and NN Group go up and down completely randomly.

Pair Corralation between Axa Equitable and NN Group

Considering the 90-day investment horizon Axa Equitable Holdings is expected to generate 0.91 times more return on investment than NN Group. However, Axa Equitable Holdings is 1.09 times less risky than NN Group. It trades about -0.23 of its potential returns per unit of risk. NN Group NV is currently generating about -0.31 per unit of risk. If you would invest  4,895  in Axa Equitable Holdings on September 12, 2024 and sell it today you would lose (259.00) from holding Axa Equitable Holdings or give up 5.29% of portfolio value over 90 days.

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

Axa Equitable Holdings  vs.  NN Group NV

Axa Equitable Holdings

Risk-Adjusted Performance

10 of 100

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Axa Equitable Holdings are ranked lower than 10 (%) of all global equities and portfolios over the last 90 days. Despite fairly fragile basic indicators, Axa Equitable demonstrated solid returns over the last few months and may actually be approaching a breakup point.

NN Group NV

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days NN Group NV has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of latest weak performance, the Stock's basic indicators remain strong and the current disturbance on Wall Street may also be a sign of long term gains for the company investors.

Pair Trading with Axa Equitable and NN Group

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

The idea behind Axa Equitable Holdings and NN Group NV 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 Commodity Directory module to find actively traded commodities issued by global exchanges.