Correlation Between Axa SA and National Australia
Can any of the company-specific risk be diversified away by investing in both Axa SA and National Australia 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 National Australia into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Axa SA ADR and National Australia Bank, you can compare the effects of market volatilities on Axa SA and National Australia 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 National Australia. Check out your portfolio center. Please also check ongoing floating volatility patterns of Axa SA and National Australia.
Diversification Opportunities for Axa SA and National Australia
0.62 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Axa and National is 0.62. Overlapping area represents the amount of risk that can be diversified away by holding Axa SA ADR and National Australia Bank in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on National Australia Bank 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 ADR are associated (or correlated) with National Australia. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of National Australia Bank has no effect on the direction of Axa SA i.e., Axa SA and National Australia go up and down completely randomly.
Pair Corralation between Axa SA and National Australia
Assuming the 90 days horizon Axa SA ADR is expected to under-perform the National Australia. But the otc stock apears to be less risky and, when comparing its historical volatility, Axa SA ADR is 1.19 times less risky than National Australia. The otc stock trades about -0.05 of its potential returns per unit of risk. The National Australia Bank is currently generating about -0.04 of returns per unit of risk over similar time horizon. If you would invest 1,383 in National Australia Bank on September 6, 2025 and sell it today you would lose (46.00) from holding National Australia Bank or give up 3.33% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Axa SA ADR vs. National Australia Bank
Performance |
| Timeline |
| Axa SA ADR |
| National Australia Bank |
Axa SA and National Australia Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Axa SA and National Australia
The main advantage of trading using opposite Axa SA and National Australia positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Axa SA position performs unexpectedly, National Australia 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 National Australia will offset losses from the drop in National Australia's long position.| Axa SA vs. Fredonia Mining | Axa SA vs. Sportsmans | Axa SA vs. US GoldMining Common | Axa SA vs. Accel Entertainment |
| National Australia vs. Park Electrochemical | National Australia vs. Silicon Motion Technology | National Australia vs. Nissan Chemical | National Australia vs. ISE Chemicals |
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 Positions Ratings module to determine portfolio positions ratings based on digital equity recommendations. Macroaxis instant position ratings are based on combination of fundamental analysis and risk-adjusted market performance.
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