Correlation Between AXA SA and Enstar Group

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

By analyzing existing cross correlation between AXA SA and Enstar Group Ltd, you can compare the effects of market volatilities on AXA SA and Enstar 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 SA with a short position of Enstar Group. Check out your portfolio center. Please also check ongoing floating volatility patterns of AXA SA and Enstar Group.

Diversification Opportunities for AXA SA and Enstar Group

0.44

Correlation Coefficient

AXA SA  Enstar Group

Very weak diversification

The 3 months correlation between AXA and Enstar is 0.44. Overlapping area represents the amount of risk that can be diversified away by holding AXA SA and Enstar Group Ltd in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Enstar Group 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 Enstar Group. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Enstar Group has no effect on the direction of AXA SA i.e., AXA SA and Enstar Group go up and down completely randomly.

Pair Corralation between AXA SA and Enstar Group

Assuming the 90 days horizon AXA SA is expected to under-perform the Enstar Group. In addition to that, AXA SA is 1.52 times more volatile than Enstar Group Ltd. It trades about -0.03 of its total potential returns per unit of risk. Enstar Group Ltd is currently generating about 0.03 per unit of volatility. If you would invest  2,024  in Enstar Group Ltd on May 5, 2025 and sell it today you would earn a total of  24.00  from holding Enstar Group Ltd or generate 1.19% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Weak
Accuracy	76.19%
Values	Daily Returns

AXA SA  vs.  Enstar Group Ltd

AXA SA

Risk-Adjusted Performance

Very Weak

Over the last 90 days AXA SA has generated negative risk-adjusted returns adding no value to investors with long positions. Despite nearly stable technical indicators, AXA SA is not utilizing all of its potentials. The recent stock price disturbance, may contribute to mid-run losses for the stockholders.

Enstar Group

Risk-Adjusted Performance

Weak

Over the last 90 days Enstar Group Ltd has generated negative risk-adjusted returns adding no value to investors with long positions. Even with relatively invariable basic indicators, Enstar Group is not utilizing all of its potentials. The recent stock price agitation, may contribute to short-term losses for the retail investors.

Pair Trading with AXA SA and Enstar Group

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

The idea behind AXA SA and Enstar Group Ltd 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 Backtesting module to avoid under-diversification and over-optimization by backtesting your portfolios.