Correlation Between Axway Software and Associated British
Can any of the company-specific risk be diversified away by investing in both Axway Software and Associated British 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 Associated British 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 Associated British Foods, you can compare the effects of market volatilities on Axway Software and Associated British 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 Associated British. Check out your portfolio center. Please also check ongoing floating volatility patterns of Axway Software and Associated British.
Diversification Opportunities for Axway Software and Associated British
-0.16 | Correlation Coefficient |
Good diversification
The 3 months correlation between Axway and Associated is -0.16. Overlapping area represents the amount of risk that can be diversified away by holding Axway Software SA and Associated British Foods in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Associated British Foods 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 Associated British. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Associated British Foods has no effect on the direction of Axway Software i.e., Axway Software and Associated British go up and down completely randomly.
Pair Corralation between Axway Software and Associated British
Assuming the 90 days trading horizon Axway Software SA is expected to generate 4.92 times more return on investment than Associated British. However, Axway Software is 4.92 times more volatile than Associated British Foods. It trades about 0.05 of its potential returns per unit of risk. Associated British Foods is currently generating about 0.0 per unit of risk. If you would invest 1,818 in Axway Software SA on October 29, 2024 and sell it today you would earn a total of 872.00 from holding Axway Software SA or generate 47.96% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 98.9% |
| Values | Daily Returns |
Axway Software SA vs. Associated British Foods
Performance |
| Timeline |
| Axway Software SA |
| Associated British Foods |
Axway Software and Associated British Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Axway Software and Associated British
The main advantage of trading using opposite Axway Software and Associated British positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Axway Software position performs unexpectedly, Associated British 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 Associated British will offset losses from the drop in Associated British's long position.| Axway Software vs. British American Tobacco | Axway Software vs. Litigation Capital Management | Axway Software vs. Applied Materials | Axway Software vs. Morgan Advanced Materials |
| Associated British vs. Porvair plc | Associated British vs. Heavitree Brewery | Associated British vs. Norwegian Air Shuttle | Associated British vs. Monster Beverage Corp |
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 Performance Analysis module to check effects of mean-variance optimization against your current asset allocation.
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