Correlation Between Axway Software and CNH Industrial
Can any of the company-specific risk be diversified away by investing in both Axway Software and CNH Industrial 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 Axway Software and CNH Industrial into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Axway Software SA and CNH Industrial NV, you can compare the effects of market volatilities on Axway Software and CNH Industrial 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 Axway Software with a short position of CNH Industrial. Check out your portfolio center. Please also check ongoing floating volatility patterns of Axway Software and CNH Industrial.
Diversification Opportunities for Axway Software and CNH Industrial
0.36 | Correlation Coefficient |
Weak diversification
The 3 months correlation between Axway and CNH is 0.36. Overlapping area represents the amount of risk that can be diversified away by holding Axway Software SA and CNH Industrial NV in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on CNH Industrial NV and Axway Software 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 Axway Software SA are associated (or correlated) with CNH Industrial. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of CNH Industrial NV has no effect on the direction of Axway Software i.e., Axway Software and CNH Industrial go up and down completely randomly.
Pair Corralation between Axway Software and CNH Industrial
Assuming the 90 days trading horizon Axway Software SA is expected to generate 0.3 times more return on investment than CNH Industrial. However, Axway Software SA is 3.35 times less risky than CNH Industrial. It trades about -0.04 of its potential returns per unit of risk. CNH Industrial NV is currently generating about -0.2 per unit of risk. If you would invest 2,760 in Axway Software SA on October 20, 2024 and sell it today you would lose (20.00) from holding Axway Software SA or give up 0.72% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 95.0% |
| Values | Daily Returns |
Axway Software SA vs. CNH Industrial NV
Performance |
| Timeline |
| Axway Software SA |
| CNH Industrial NV |
Axway Software and CNH Industrial Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Axway Software and CNH Industrial
The main advantage of trading using opposite Axway Software and CNH Industrial positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Axway Software position performs unexpectedly, CNH Industrial 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 CNH Industrial will offset losses from the drop in CNH Industrial's long position.| Axway Software vs. EJF Investments | Axway Software vs. Tyson Foods Cl | Axway Software vs. Edita Food Industries | Axway Software vs. Kinnevik Investment AB |
| CNH Industrial vs. Axway Software SA | CNH Industrial vs. Check Point Software | CNH Industrial vs. Take Two Interactive Software | CNH Industrial vs. Austevoll Seafood ASA |
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 My Watchlist Analysis module to analyze my current watchlist and to refresh optimization strategy. Macroaxis watchlist is based on self-learning algorithm to remember stocks you like.
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