Correlation Between FF Global and AXA World

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

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

Diversification Opportunities for FF Global and AXA World

-0.6

Correlation Coefficient

FF Global  AXA World

Excellent diversification

The 3 months correlation between FJ2P and AXA is -0.6. Overlapping area represents the amount of risk that can be diversified away by holding FF Global and AXA World Funds in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on AXA World Funds and FF Global 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 FF Global are associated (or correlated) with AXA World. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of AXA World Funds has no effect on the direction of FF Global i.e., FF Global and AXA World go up and down completely randomly.

Pair Corralation between FF Global and AXA World

Assuming the 90 days trading horizon FF Global is expected to generate 2.74 times more return on investment than AXA World. However, FF Global is 2.74 times more volatile than AXA World Funds. It trades about 0.21 of its potential returns per unit of risk. AXA World Funds is currently generating about -0.02 per unit of risk. If you would invest  6,576  in FF Global on September 12, 2024 and sell it today you would earn a total of  894.00  from holding FF Global or generate 13.59% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Weak
Accuracy	98.39%
Values	Daily Returns

FF Global  vs.  AXA World Funds

FF Global

Risk-Adjusted Performance

16 of 100

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in FF Global are ranked lower than 16 (%) of all funds and portfolios of funds over the last 90 days. In spite of rather weak technical and fundamental indicators, FF Global exhibited solid returns over the last few months and may actually be approaching a breakup point.

AXA World Funds

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days AXA World Funds has generated negative risk-adjusted returns adding no value to fund investors. In spite of comparatively stable basic indicators, AXA World is not utilizing all of its potentials. The current stock price uproar, may contribute to short-horizon losses for the private investors.

Pair Trading with FF Global and AXA World

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

The idea behind FF Global and AXA World Funds 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 Pattern Recognition module to use different Pattern Recognition models to time the market across multiple global exchanges.