Correlation Between AXAMANSARD INSURANCE and CORNERSTONE INSURANCE

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

By analyzing existing cross correlation between AXAMANSARD INSURANCE PLC and CORNERSTONE INSURANCE PLC, you can compare the effects of market volatilities on AXAMANSARD INSURANCE and CORNERSTONE INSURANCE 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 AXAMANSARD INSURANCE with a short position of CORNERSTONE INSURANCE. Check out your portfolio center. Please also check ongoing floating volatility patterns of AXAMANSARD INSURANCE and CORNERSTONE INSURANCE.

Diversification Opportunities for AXAMANSARD INSURANCE and CORNERSTONE INSURANCE

0.72

Correlation Coefficient

AXAMANSARD INSURANCE  CORNERSTONE INSURANCE

Poor diversification

The 3 months correlation between AXAMANSARD and CORNERSTONE is 0.72. Overlapping area represents the amount of risk that can be diversified away by holding AXAMANSARD INSURANCE PLC and CORNERSTONE INSURANCE PLC in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on CORNERSTONE INSURANCE PLC and AXAMANSARD INSURANCE 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 AXAMANSARD INSURANCE PLC are associated (or correlated) with CORNERSTONE INSURANCE. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of CORNERSTONE INSURANCE PLC has no effect on the direction of AXAMANSARD INSURANCE i.e., AXAMANSARD INSURANCE and CORNERSTONE INSURANCE go up and down completely randomly.

Pair Corralation between AXAMANSARD INSURANCE and CORNERSTONE INSURANCE

Assuming the 90 days trading horizon AXAMANSARD INSURANCE PLC is expected to generate 0.64 times more return on investment than CORNERSTONE INSURANCE. However, AXAMANSARD INSURANCE PLC is 1.56 times less risky than CORNERSTONE INSURANCE. It trades about 0.16 of its potential returns per unit of risk. CORNERSTONE INSURANCE PLC is currently generating about 0.09 per unit of risk. If you would invest  704.00  in AXAMANSARD INSURANCE PLC on December 1, 2024 and sell it today you would earn a total of  201.00  from holding AXAMANSARD INSURANCE PLC or generate 28.55% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Significant
Accuracy	100.0%
Values	Daily Returns

AXAMANSARD INSURANCE PLC  vs.  CORNERSTONE INSURANCE PLC

AXAMANSARD INSURANCE PLC

Risk-Adjusted Performance

Good

Compared to the overall equity markets, risk-adjusted returns on investments in AXAMANSARD INSURANCE PLC are ranked lower than 12 (%) of all global equities and portfolios over the last 90 days. In spite of rather uncertain basic indicators, AXAMANSARD INSURANCE exhibited solid returns over the last few months and may actually be approaching a breakup point.

CORNERSTONE INSURANCE PLC

Risk-Adjusted Performance

OK

Compared to the overall equity markets, risk-adjusted returns on investments in CORNERSTONE INSURANCE PLC are ranked lower than 7 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively uncertain basic indicators, CORNERSTONE INSURANCE unveiled solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with AXAMANSARD INSURANCE and CORNERSTONE INSURANCE

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

The idea behind AXAMANSARD INSURANCE PLC and CORNERSTONE INSURANCE PLC 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 Portfolio File Import module to quickly import all of your third-party portfolios from your local drive in csv format.