Correlation Between Axway Software and Octopus Aim
Can any of the company-specific risk be diversified away by investing in both Axway Software and Octopus Aim 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 Octopus Aim 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 Octopus Aim Vct, you can compare the effects of market volatilities on Axway Software and Octopus Aim 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 Octopus Aim. Check out your portfolio center. Please also check ongoing floating volatility patterns of Axway Software and Octopus Aim.
Diversification Opportunities for Axway Software and Octopus Aim
-0.56 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Axway and Octopus is -0.56. Overlapping area represents the amount of risk that can be diversified away by holding Axway Software SA and Octopus Aim Vct in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Octopus Aim Vct 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 Octopus Aim. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Octopus Aim Vct has no effect on the direction of Axway Software i.e., Axway Software and Octopus Aim go up and down completely randomly.
Pair Corralation between Axway Software and Octopus Aim
Assuming the 90 days trading horizon Axway Software SA is expected to generate 2.57 times more return on investment than Octopus Aim. However, Axway Software is 2.57 times more volatile than Octopus Aim Vct. It trades about 0.07 of its potential returns per unit of risk. Octopus Aim Vct is currently generating about -0.04 per unit of risk. If you would invest 2,368 in Axway Software SA on December 11, 2024 and sell it today you would earn a total of 672.00 from holding Axway Software SA or generate 28.38% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 75.81% |
| Values | Daily Returns |
Axway Software SA vs. Octopus Aim Vct
Performance |
| Timeline |
| Axway Software SA |
| Octopus Aim Vct |
Axway Software and Octopus Aim Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Axway Software and Octopus Aim
The main advantage of trading using opposite Axway Software and Octopus Aim positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Axway Software position performs unexpectedly, Octopus Aim 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 Octopus Aim will offset losses from the drop in Octopus Aim's long position.| Axway Software vs. Caledonia Mining | ||
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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 AI Portfolio Architect module to use AI to generate optimal portfolios and find profitable investment opportunities.
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