Correlation Between Alphabet and AXIS Capital

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

By analyzing existing cross correlation between Alphabet Inc Class C and AXIS Capital Holdings, you can compare the effects of market volatilities on Alphabet and AXIS Capital 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 Alphabet with a short position of AXIS Capital. Check out your portfolio center. Please also check ongoing floating volatility patterns of Alphabet and AXIS Capital.

Diversification Opportunities for Alphabet and AXIS Capital

0.14

Correlation Coefficient

Alphabet  AXIS Capital

Average diversification

The 3 months correlation between Alphabet and AXIS is 0.14. Overlapping area represents the amount of risk that can be diversified away by holding Alphabet Inc Class C and AXIS Capital Holdings in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on AXIS Capital Holdings and Alphabet 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 Alphabet Inc Class C are associated (or correlated) with AXIS Capital. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of AXIS Capital Holdings has no effect on the direction of Alphabet i.e., Alphabet and AXIS Capital go up and down completely randomly.

Pair Corralation between Alphabet and AXIS Capital

Given the investment horizon of 90 days Alphabet Inc Class C is expected to generate 1.22 times more return on investment than AXIS Capital. However, Alphabet is 1.22 times more volatile than AXIS Capital Holdings. It trades about 0.16 of its potential returns per unit of risk. AXIS Capital Holdings is currently generating about 0.04 per unit of risk. If you would invest  16,365  in Alphabet Inc Class C on April 25, 2025 and sell it today you would earn a total of  2,786  from holding Alphabet Inc Class C or generate 17.02% return on investment over 90 days.

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

Alphabet Inc Class C  vs.  AXIS Capital Holdings

Alphabet Class C

Risk-Adjusted Performance

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Alphabet Inc Class C are ranked lower than 12 (%) of all global equities and portfolios over the last 90 days. Despite nearly conflicting basic indicators, Alphabet reported solid returns over the last few months and may actually be approaching a breakup point.

AXIS Capital Holdings

Risk-Adjusted Performance

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in AXIS Capital Holdings are ranked lower than 3 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively stable basic indicators, AXIS Capital is not utilizing all of its potentials. The latest stock price uproar, may contribute to short-horizon losses for the private investors.

Pair Trading with Alphabet and AXIS Capital

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

The idea behind Alphabet Inc Class C and AXIS Capital Holdings 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 Share Portfolio module to track or share privately all of your investments from the convenience of any device.