Correlation Between X FAB and Axway Software
Can any of the company-specific risk be diversified away by investing in both X FAB 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 X FAB and Axway Software into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between X FAB Silicon Foundries and Axway Software SA, you can compare the effects of market volatilities on X FAB 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 X FAB with a short position of Axway Software. Check out your portfolio center. Please also check ongoing floating volatility patterns of X FAB and Axway Software.
Diversification Opportunities for X FAB and Axway Software
-0.75 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between 0ROZ and Axway is -0.75. Overlapping area represents the amount of risk that can be diversified away by holding X FAB Silicon Foundries 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 X FAB 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 X FAB Silicon Foundries 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 X FAB i.e., X FAB and Axway Software go up and down completely randomly.
Pair Corralation between X FAB and Axway Software
Assuming the 90 days trading horizon X FAB Silicon Foundries is expected to under-perform the Axway Software. But the stock apears to be less risky and, when comparing its historical volatility, X FAB Silicon Foundries is 1.3 times less risky than Axway Software. The stock trades about -0.11 of its potential returns per unit of risk. The Axway Software SA is currently generating about 0.05 of returns per unit of risk over similar time horizon. If you would invest 2,360 in Axway Software SA on September 1, 2024 and sell it today you would earn a total of 410.00 from holding Axway Software SA or generate 17.37% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 98.46% |
| Values | Daily Returns |
X FAB Silicon Foundries vs. Axway Software SA
Performance |
| Timeline |
| X FAB Silicon |
| Axway Software SA |
X FAB and Axway Software Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with X FAB and Axway Software
The main advantage of trading using opposite X FAB and Axway Software positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if X FAB 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.| X FAB vs. Gamma Communications PLC | X FAB vs. Dalata Hotel Group | X FAB vs. Zegona Communications Plc | X FAB vs. Gaztransport et Technigaz |
| Axway Software vs. Uniper SE | Axway Software vs. Mulberry Group PLC | Axway Software vs. London Security Plc | Axway Software vs. Triad Group PLC |
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 Commodity Channel module to use Commodity Channel Index to analyze current equity momentum.
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