Correlation Between Alstria Office and Axway Software
Can any of the company-specific risk be diversified away by investing in both Alstria Office and Axway Software 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 Alstria Office and Axway Software into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between alstria office REIT AG and Axway Software SA, you can compare the effects of market volatilities on Alstria Office and Axway Software 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 Alstria Office with a short position of Axway Software. Check out your portfolio center. Please also check ongoing floating volatility patterns of Alstria Office and Axway Software.
Diversification Opportunities for Alstria Office and Axway Software
0.86 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Alstria and Axway is 0.86. Overlapping area represents the amount of risk that can be diversified away by holding alstria office REIT AG and Axway Software SA in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Axway Software SA and Alstria Office 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 alstria office REIT AG are associated (or correlated) with Axway Software. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Axway Software SA has no effect on the direction of Alstria Office i.e., Alstria Office and Axway Software go up and down completely randomly.
Pair Corralation between Alstria Office and Axway Software
Assuming the 90 days trading horizon alstria office REIT AG is expected to generate 4.19 times more return on investment than Axway Software. However, Alstria Office is 4.19 times more volatile than Axway Software SA. It trades about 0.35 of its potential returns per unit of risk. Axway Software SA is currently generating about 0.05 per unit of risk. If you would invest 682.00 in alstria office REIT AG on September 20, 2024 and sell it today you would earn a total of 87.00 from holding alstria office REIT AG or generate 12.76% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
alstria office REIT AG vs. Axway Software SA
Performance |
| Timeline |
| alstria office REIT |
| Axway Software SA |
Alstria Office and Axway Software Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Alstria Office and Axway Software
The main advantage of trading using opposite Alstria Office and Axway Software positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Alstria Office position performs unexpectedly, Axway Software 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 Axway Software will offset losses from the drop in Axway Software's long position.| Alstria Office vs. Batm Advanced Communications | Alstria Office vs. MTI Wireless Edge | Alstria Office vs. Infrastrutture Wireless Italiane | Alstria Office vs. Axway Software SA |
| Axway Software vs. Samsung Electronics Co | Axway Software vs. Samsung Electronics Co | Axway Software vs. Hyundai Motor | Axway Software vs. Reliance Industries Ltd |
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 Odds Of Bankruptcy module to get analysis of equity chance of financial distress in the next 2 years.
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