Correlation Between AXA SA and Innelec Multimedia

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

By analyzing existing cross correlation between AXA SA and Innelec Multimedia, you can compare the effects of market volatilities on AXA SA and Innelec Multimedia 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 Innelec Multimedia. Check out your portfolio center. Please also check ongoing floating volatility patterns of AXA SA and Innelec Multimedia.

Diversification Opportunities for AXA SA and Innelec Multimedia

0.83

Correlation Coefficient

AXA SA  Innelec Multimedia

Very poor diversification

The 3 months correlation between AXA and Innelec is 0.83. Overlapping area represents the amount of risk that can be diversified away by holding AXA SA and Innelec Multimedia in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Innelec Multimedia 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 Innelec Multimedia. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Innelec Multimedia has no effect on the direction of AXA SA i.e., AXA SA and Innelec Multimedia go up and down completely randomly.

Pair Corralation between AXA SA and Innelec Multimedia

Assuming the 90 days horizon AXA SA is expected to generate 0.3 times more return on investment than Innelec Multimedia. However, AXA SA is 3.31 times less risky than Innelec Multimedia. It trades about 0.1 of its potential returns per unit of risk. Innelec Multimedia is currently generating about -0.01 per unit of risk. If you would invest  2,501  in AXA SA on April 20, 2025 and sell it today you would earn a total of  1,688  from holding AXA SA or generate 67.49% return on investment over 90 days.

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

AXA SA  vs.  Innelec Multimedia

AXA SA

Risk-Adjusted Performance

Good

Compared to the overall equity markets, risk-adjusted returns on investments in AXA SA are ranked lower than 12 (%) of all global equities and portfolios over the last 90 days. Despite somewhat weak basic indicators, AXA SA may actually be approaching a critical reversion point that can send shares even higher in August 2025.

Innelec Multimedia

Risk-Adjusted Performance

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Innelec Multimedia are ranked lower than 11 (%) of all global equities and portfolios over the last 90 days. Even with relatively weak basic indicators, Innelec Multimedia reported solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with AXA SA and Innelec Multimedia

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

The idea behind AXA SA and Innelec Multimedia 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 Insider Screener module to find insiders across different sectors to evaluate their impact on performance.