Correlation Between Axway Software and CleanTech Lithium
Can any of the company-specific risk be diversified away by investing in both Axway Software and CleanTech Lithium 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 CleanTech Lithium 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 CleanTech Lithium plc, you can compare the effects of market volatilities on Axway Software and CleanTech Lithium 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 CleanTech Lithium. Check out your portfolio center. Please also check ongoing floating volatility patterns of Axway Software and CleanTech Lithium.
Diversification Opportunities for Axway Software and CleanTech Lithium
0.38 | Correlation Coefficient |
Weak diversification
The 3 months correlation between Axway and CleanTech is 0.38. Overlapping area represents the amount of risk that can be diversified away by holding Axway Software SA and CleanTech Lithium plc in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on CleanTech Lithium plc 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 CleanTech Lithium. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of CleanTech Lithium plc has no effect on the direction of Axway Software i.e., Axway Software and CleanTech Lithium go up and down completely randomly.
Pair Corralation between Axway Software and CleanTech Lithium
Assuming the 90 days trading horizon Axway Software SA is expected to under-perform the CleanTech Lithium. But the stock apears to be less risky and, when comparing its historical volatility, Axway Software SA is 2.72 times less risky than CleanTech Lithium. The stock trades about -0.02 of its potential returns per unit of risk. The CleanTech Lithium plc is currently generating about 0.05 of returns per unit of risk over similar time horizon. If you would invest 1,630 in CleanTech Lithium plc on November 8, 2024 and sell it today you would earn a total of 40.00 from holding CleanTech Lithium plc or generate 2.45% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 73.91% |
| Values | Daily Returns |
Axway Software SA vs. CleanTech Lithium plc
Performance |
| Timeline |
| Axway Software SA |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
| CleanTech Lithium plc |
Axway Software and CleanTech Lithium Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Axway Software and CleanTech Lithium
The main advantage of trading using opposite Axway Software and CleanTech Lithium positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Axway Software position performs unexpectedly, CleanTech Lithium 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 CleanTech Lithium will offset losses from the drop in CleanTech Lithium's long position.| Axway Software vs. Logitech International SA | Axway Software vs. Arcticzymes Technologies ASA | Axway Software vs. Concurrent Technologies Plc | Axway Software vs. Software Circle plc |
| CleanTech Lithium vs. Porvair plc | CleanTech Lithium vs. Silver Bullet Data | CleanTech Lithium vs. United Airlines Holdings | CleanTech Lithium vs. Extra Space Storage |
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 Idea Analyzer module to analyze all characteristics, volatility and risk-adjusted return of Macroaxis ideas.
Other Complementary Tools
| Global Correlations Find global opportunities by holding instruments from different markets | |
| Equity Forecasting Use basic forecasting models to generate price predictions and determine price momentum | |
| ETF Categories List of ETF categories grouped based on various criteria, such as the investment strategy or type of investments | |
| Stock Screener Find equities using a custom stock filter or screen asymmetry in trading patterns, price, volume, or investment outlook. | |
| Performance Analysis Check effects of mean-variance optimization against your current asset allocation |