Correlation Between IA FINANCIAL and Axway Software
Can any of the company-specific risk be diversified away by investing in both IA FINANCIAL 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 IA FINANCIAL and Axway Software into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between IA FINANCIAL P and Axway Software SA, you can compare the effects of market volatilities on IA FINANCIAL 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 IA FINANCIAL with a short position of Axway Software. Check out your portfolio center. Please also check ongoing floating volatility patterns of IA FINANCIAL and Axway Software.
Diversification Opportunities for IA FINANCIAL and Axway Software
0.78 | Correlation Coefficient |
Poor diversification
The 3 months correlation between 1OD and Axway is 0.78. Overlapping area represents the amount of risk that can be diversified away by holding IA FINANCIAL P 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 IA FINANCIAL 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 IA FINANCIAL P 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 IA FINANCIAL i.e., IA FINANCIAL and Axway Software go up and down completely randomly.
Pair Corralation between IA FINANCIAL and Axway Software
Assuming the 90 days horizon IA FINANCIAL P is expected to generate 1.34 times more return on investment than Axway Software. However, IA FINANCIAL is 1.34 times more volatile than Axway Software SA. It trades about 0.25 of its potential returns per unit of risk. Axway Software SA is currently generating about 0.0 per unit of risk. If you would invest 8,514 in IA FINANCIAL P on September 12, 2024 and sell it today you would earn a total of 486.00 from holding IA FINANCIAL P or generate 5.71% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 95.65% |
| Values | Daily Returns |
IA FINANCIAL P vs. Axway Software SA
Performance |
| Timeline |
| IA FINANCIAL P |
| Axway Software SA |
IA FINANCIAL and Axway Software Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with IA FINANCIAL and Axway Software
The main advantage of trading using opposite IA FINANCIAL and Axway Software positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if IA FINANCIAL 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.| IA FINANCIAL vs. Consolidated Communications Holdings | IA FINANCIAL vs. JJ SNACK FOODS | IA FINANCIAL vs. NISSIN FOODS HLDGS | IA FINANCIAL vs. SBM OFFSHORE |
| Axway Software vs. GUARDANT HEALTH CL | Axway Software vs. Natural Health Trends | Axway Software vs. Sabra Health Care | Axway Software vs. ATRYS HEALTH SA |
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 Equity Analysis module to research over 250,000 global equities including funds, stocks and ETFs to find investment opportunities.
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