Correlation Between AXA SA and Orange SA

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

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

Diversification Opportunities for AXA SA and Orange SA

0.56

Correlation Coefficient

AXA SA  Orange SA

Very weak diversification

The 3 months correlation between AXA and Orange is 0.56. Overlapping area represents the amount of risk that can be diversified away by holding AXA SA and Orange SA in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Orange SA 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 Orange SA. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Orange SA has no effect on the direction of AXA SA i.e., AXA SA and Orange SA go up and down completely randomly.

Pair Corralation between AXA SA and Orange SA

Assuming the 90 days horizon AXA SA is expected to generate 0.92 times more return on investment than Orange SA. However, AXA SA is 1.08 times less risky than Orange SA. It trades about 0.14 of its potential returns per unit of risk. Orange SA is currently generating about 0.12 per unit of risk. If you would invest  3,819  in AXA SA on April 24, 2025 and sell it today you would earn a total of  332.00  from holding AXA SA or generate 8.69% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Weak
Accuracy	98.44%
Values	Daily Returns

AXA SA  vs.  Orange SA

AXA SA

Risk-Adjusted Performance

Good

Compared to the overall equity markets, risk-adjusted returns on investments in AXA SA are ranked lower than 11 (%) 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.

Orange SA

Risk-Adjusted Performance

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Orange SA are ranked lower than 9 (%) of all global equities and portfolios over the last 90 days. Despite somewhat weak basic indicators, Orange SA may actually be approaching a critical reversion point that can send shares even higher in August 2025.

Pair Trading with AXA SA and Orange SA

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

The idea behind AXA SA and Orange SA 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 Performance Analysis module to check effects of mean-variance optimization against your current asset allocation.