Correlation Between Principal Financial and AXA SA
Can any of the company-specific risk be diversified away by investing in both Principal Financial and AXA 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 Principal Financial and AXA SA into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Principal Financial Group and AXA SA, you can compare the effects of market volatilities on Principal Financial and AXA 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 Principal Financial with a short position of AXA SA. Check out your portfolio center. Please also check ongoing floating volatility patterns of Principal Financial and AXA SA.
Diversification Opportunities for Principal Financial and AXA SA
0.37 | Correlation Coefficient |
Weak diversification
The 3 months correlation between Principal and AXA is 0.37. Overlapping area represents the amount of risk that can be diversified away by holding Principal Financial Group and AXA SA in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on AXA SA and Principal Financial 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 Principal Financial Group are associated (or correlated) with AXA SA. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of AXA SA has no effect on the direction of Principal Financial i.e., Principal Financial and AXA SA go up and down completely randomly.
Pair Corralation between Principal Financial and AXA SA
Assuming the 90 days horizon Principal Financial is expected to generate 1.33 times less return on investment than AXA SA. In addition to that, Principal Financial is 1.27 times more volatile than AXA SA. It trades about 0.08 of its total potential returns per unit of risk. AXA SA is currently generating about 0.14 per unit of volatility. If you would invest 3,823 in AXA SA on April 25, 2025 and sell it today you would earn a total of 397.00 from holding AXA SA or generate 10.38% return on investment over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Together |
Strength | Very Weak |
Accuracy | 100.0% |
Values | Daily Returns |
Principal Financial Group vs. AXA SA
Performance |
Timeline |
Principal Financial |
AXA SA |
Principal Financial and AXA SA Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with Principal Financial and AXA SA
The main advantage of trading using opposite Principal Financial and AXA SA positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Principal Financial position performs unexpectedly, AXA 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 AXA SA will offset losses from the drop in AXA SA's long position.Principal Financial vs. SOGECLAIR SA INH | Principal Financial vs. QLEANAIR AB SK 50 | Principal Financial vs. GREENX METALS LTD | Principal Financial vs. SYSTEMAIR AB |
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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 Cryptocurrency Center module to build and monitor diversified portfolio of extremely risky digital assets and cryptocurrency.
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