Correlation Between AXA SA and Westpac Banking
Can any of the company-specific risk be diversified away by investing in both AXA SA and Westpac Banking 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 Westpac Banking into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between AXA SA and Westpac Banking, you can compare the effects of market volatilities on AXA SA and Westpac Banking 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 Westpac Banking. Check out your portfolio center. Please also check ongoing floating volatility patterns of AXA SA and Westpac Banking.
Diversification Opportunities for AXA SA and Westpac Banking
-0.07 | Correlation Coefficient |
Good diversification
The 3 months correlation between AXA and Westpac is -0.07. Overlapping area represents the amount of risk that can be diversified away by holding AXA SA and Westpac Banking in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Westpac Banking 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 Westpac Banking. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Westpac Banking has no effect on the direction of AXA SA i.e., AXA SA and Westpac Banking go up and down completely randomly.
Pair Corralation between AXA SA and Westpac Banking
Assuming the 90 days horizon AXA SA is expected to under-perform the Westpac Banking. But the otc stock apears to be less risky and, when comparing its historical volatility, AXA SA is 1.87 times less risky than Westpac Banking. The otc stock trades about 0.0 of its potential returns per unit of risk. The Westpac Banking is currently generating about 0.02 of returns per unit of risk over similar time horizon. If you would invest 2,398 in Westpac Banking on September 2, 2025 and sell it today you would earn a total of 42.00 from holding Westpac Banking or generate 1.75% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
AXA SA vs. Westpac Banking
Performance |
| Timeline |
| AXA SA |
| Westpac Banking |
AXA SA and Westpac Banking Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with AXA SA and Westpac Banking
The main advantage of trading using opposite AXA SA and Westpac Banking positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if AXA SA position performs unexpectedly, Westpac Banking 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 Westpac Banking will offset losses from the drop in Westpac Banking's long position.| AXA SA vs. GungHo Online Entertainment | AXA SA vs. Martin Marietta Materials | AXA SA vs. Hyster Yale Materials Handling | AXA SA vs. SCI Engineered Materials |
| Westpac Banking vs. Evolution Mining Limited | Westpac Banking vs. Compass Diversified Holdings | Westpac Banking vs. PennyMac Mortgage Investment | Westpac Banking vs. Hunter Creek Mining |
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 Portfolio Analyzer module to portfolio analysis module that provides access to portfolio diagnostics and optimization engine.
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