Correlation Between AXWAY SOFTWARE and Strategic Investments
Can any of the company-specific risk be diversified away by investing in both AXWAY SOFTWARE and Strategic Investments 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 Strategic Investments into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between AXWAY SOFTWARE EO and Strategic Investments AS, you can compare the effects of market volatilities on AXWAY SOFTWARE and Strategic Investments 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 Strategic Investments. Check out your portfolio center. Please also check ongoing floating volatility patterns of AXWAY SOFTWARE and Strategic Investments.
Diversification Opportunities for AXWAY SOFTWARE and Strategic Investments
-0.27 | Correlation Coefficient |
Very good diversification
The 3 months correlation between AXWAY and Strategic is -0.27. Overlapping area represents the amount of risk that can be diversified away by holding AXWAY SOFTWARE EO and Strategic Investments AS in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Strategic Investments 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 EO are associated (or correlated) with Strategic Investments. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Strategic Investments has no effect on the direction of AXWAY SOFTWARE i.e., AXWAY SOFTWARE and Strategic Investments go up and down completely randomly.
Pair Corralation between AXWAY SOFTWARE and Strategic Investments
Assuming the 90 days horizon AXWAY SOFTWARE is expected to generate 2.8 times less return on investment than Strategic Investments. But when comparing it to its historical volatility, AXWAY SOFTWARE EO is 2.93 times less risky than Strategic Investments. It trades about 0.04 of its potential returns per unit of risk. Strategic Investments AS is currently generating about 0.04 of returns per unit of risk over similar time horizon. If you would invest 10.00 in Strategic Investments AS on August 31, 2024 and sell it today you would earn a total of 4.00 from holding Strategic Investments AS or generate 40.0% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
AXWAY SOFTWARE EO vs. Strategic Investments AS
Performance |
| Timeline |
| AXWAY SOFTWARE EO |
| Strategic Investments |
AXWAY SOFTWARE and Strategic Investments Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with AXWAY SOFTWARE and Strategic Investments
The main advantage of trading using opposite AXWAY SOFTWARE and Strategic Investments positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if AXWAY SOFTWARE position performs unexpectedly, Strategic Investments 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 Strategic Investments will offset losses from the drop in Strategic Investments' long position.| AXWAY SOFTWARE vs. Taiwan Semiconductor Manufacturing | AXWAY SOFTWARE vs. Magnachip Semiconductor | AXWAY SOFTWARE vs. PennyMac Mortgage Investment | AXWAY SOFTWARE vs. Elmos Semiconductor SE |
| Strategic Investments vs. Ameriprise Financial | Strategic Investments vs. Ares Management Corp | Strategic Investments vs. Superior Plus Corp | Strategic Investments vs. NMI Holdings |
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 FinTech Suite module to use AI to screen and filter profitable investment opportunities.
Other Complementary Tools
| Portfolio Optimization Compute new portfolio that will generate highest expected return given your specified tolerance for risk | |
| Bollinger Bands Use Bollinger Bands indicator to analyze target price for a given investing horizon | |
| Efficient Frontier Plot and analyze your portfolio and positions against risk-return landscape of the market. | |
| Portfolio Suggestion Get suggestions outside of your existing asset allocation including your own model portfolios | |
| Portfolio Rebalancing Analyze risk-adjusted returns against different time horizons to find asset-allocation targets |