Correlation Between National Bank and Axway Software
Can any of the company-specific risk be diversified away by investing in both National Bank 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 National Bank and Axway Software into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between National Bank of and Axway Software SA, you can compare the effects of market volatilities on National Bank 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 National Bank with a short position of Axway Software. Check out your portfolio center. Please also check ongoing floating volatility patterns of National Bank and Axway Software.
Diversification Opportunities for National Bank and Axway Software
0.0 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between National and Axway is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding National Bank of 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 National Bank 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 National Bank of 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 National Bank i.e., National Bank and Axway Software go up and down completely randomly.
Pair Corralation between National Bank and Axway Software
Assuming the 90 days trading horizon National Bank is expected to generate 8.52 times less return on investment than Axway Software. But when comparing it to its historical volatility, National Bank of is 4.37 times less risky than Axway Software. It trades about 0.03 of its potential returns per unit of risk. Axway Software SA is currently generating about 0.05 of returns per unit of risk over similar time horizon. If you would invest 1,488 in Axway Software SA on September 20, 2024 and sell it today you would earn a total of 1,272 from holding Axway Software SA or generate 85.48% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Flat |
| Strength | Insignificant |
| Accuracy | 94.79% |
| Values | Daily Returns |
National Bank of vs. Axway Software SA
Performance |
| Timeline |
| National Bank |
| Axway Software SA |
National Bank and Axway Software Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with National Bank and Axway Software
The main advantage of trading using opposite National Bank and Axway Software positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if National Bank 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.| National Bank vs. Advanced Medical Solutions | National Bank vs. Litigation Capital Management | National Bank vs. Fresenius Medical Care | National Bank vs. Martin Marietta Materials |
| 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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