Correlation Between Hua Hong and Axway Software
Can any of the company-specific risk be diversified away by investing in both Hua Hong 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 Hua Hong and Axway Software into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Hua Hong Semiconductor and Axway Software SA, you can compare the effects of market volatilities on Hua Hong 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 Hua Hong with a short position of Axway Software. Check out your portfolio center. Please also check ongoing floating volatility patterns of Hua Hong and Axway Software.
Diversification Opportunities for Hua Hong and Axway Software
-0.39 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Hua and Axway is -0.39. Overlapping area represents the amount of risk that can be diversified away by holding Hua Hong Semiconductor 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 Hua Hong 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 Hua Hong Semiconductor 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 Hua Hong i.e., Hua Hong and Axway Software go up and down completely randomly.
Pair Corralation between Hua Hong and Axway Software
Assuming the 90 days horizon Hua Hong is expected to generate 20.04 times less return on investment than Axway Software. In addition to that, Hua Hong is 1.98 times more volatile than Axway Software SA. It trades about 0.0 of its total potential returns per unit of risk. Axway Software SA is currently generating about 0.05 per unit of volatility. If you would invest 1,789 in Axway Software SA on October 11, 2024 and sell it today you would earn a total of 861.00 from holding Axway Software SA or generate 48.13% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Hua Hong Semiconductor vs. Axway Software SA
Performance |
| Timeline |
| Hua Hong Semiconductor |
| Axway Software SA |
Hua Hong and Axway Software Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Hua Hong and Axway Software
The main advantage of trading using opposite Hua Hong and Axway Software positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Hua Hong 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.| Hua Hong vs. Electronic Arts | Hua Hong vs. Nucletron Electronic Aktiengesellschaft | Hua Hong vs. STMICROELECTRONICS | Hua Hong vs. Inspire Medical Systems |
| Axway Software vs. GOLD ROAD RES | Axway Software vs. Hua Hong Semiconductor | Axway Software vs. EVS Broadcast Equipment | Axway Software vs. Nordic Semiconductor ASA |
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 Portfolio Center module to all portfolio management and optimization tools to improve performance of your portfolios.
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