Correlation Between Axa SA and Assicurazioni Generali

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Can any of the company-specific risk be diversified away by investing in both Axa SA and Assicurazioni Generali 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 Assicurazioni Generali into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Axa SA ADR and Assicurazioni Generali SpA, you can compare the effects of market volatilities on Axa SA and Assicurazioni Generali 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 Assicurazioni Generali. Check out your portfolio center. Please also check ongoing floating volatility patterns of Axa SA and Assicurazioni Generali.

Diversification Opportunities for Axa SA and Assicurazioni Generali

0.47
  Correlation Coefficient

Very weak diversification

The 3 months correlation between Axa and Assicurazioni is 0.47. Overlapping area represents the amount of risk that can be diversified away by holding Axa SA ADR and Assicurazioni Generali SpA in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Assicurazioni Generali 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 ADR are associated (or correlated) with Assicurazioni Generali. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Assicurazioni Generali has no effect on the direction of Axa SA i.e., Axa SA and Assicurazioni Generali go up and down completely randomly.

Pair Corralation between Axa SA and Assicurazioni Generali

If you would invest  2,166  in Assicurazioni Generali SpA on December 29, 2023 and sell it today you would earn a total of  334.00  from holding Assicurazioni Generali SpA or generate 15.42% return on investment over 90 days.
Time Period3 Months [change]
DirectionMoves Together 
StrengthWeak
Accuracy4.55%
ValuesDaily Returns

Axa SA ADR  vs.  Assicurazioni Generali SpA

 Performance 
       Timeline  
Axa SA ADR 

Risk-Adjusted Performance

0 of 100

 
Low
 
High
OK
Over the last 90 days Axa SA ADR has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of fairly strong technical indicators, Axa SA is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.
Assicurazioni Generali 

Risk-Adjusted Performance

12 of 100

 
Low
 
High
Good
Compared to the overall equity markets, risk-adjusted returns on investments in Assicurazioni Generali SpA are ranked lower than 12 (%) of all global equities and portfolios over the last 90 days. Despite nearly weak technical and fundamental indicators, Assicurazioni Generali reported solid returns over the last few months and may actually be approaching a breakup point.

Axa SA and Assicurazioni Generali Volatility Contrast

   Predicted Return Density   
       Returns  

Pair Trading with Axa SA and Assicurazioni Generali

The main advantage of trading using opposite Axa SA and Assicurazioni Generali positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Axa SA position performs unexpectedly, Assicurazioni Generali 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 Assicurazioni Generali will offset losses from the drop in Assicurazioni Generali's long position.
The idea behind Axa SA ADR and Assicurazioni Generali SpA 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 Companies Directory module to evaluate performance of over 100,000 Stocks, Funds, and ETFs against different fundamentals.

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