Correlation Between AXWAY SOFTWARE and H M

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Can any of the company-specific risk be diversified away by investing in both AXWAY SOFTWARE and H M 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 H M 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 H M Hennes, you can compare the effects of market volatilities on AXWAY SOFTWARE and H M 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 H M. Check out your portfolio center. Please also check ongoing floating volatility patterns of AXWAY SOFTWARE and H M.

Diversification Opportunities for AXWAY SOFTWARE and H M

0.48
  Correlation Coefficient
 H M

Very weak diversification

The 3 months correlation between AXWAY and HMSB is 0.48. Overlapping area represents the amount of risk that can be diversified away by holding AXWAY SOFTWARE EO and H M Hennes in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on H M Hennes 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 H M. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of H M Hennes has no effect on the direction of AXWAY SOFTWARE i.e., AXWAY SOFTWARE and H M go up and down completely randomly.

Pair Corralation between AXWAY SOFTWARE and H M

Assuming the 90 days horizon AXWAY SOFTWARE EO is expected to generate 0.61 times more return on investment than H M. However, AXWAY SOFTWARE EO is 1.64 times less risky than H M. It trades about -0.1 of its potential returns per unit of risk. H M Hennes is currently generating about -0.24 per unit of risk. If you would invest  2,730  in AXWAY SOFTWARE EO on October 11, 2024 and sell it today you would lose (80.00) from holding AXWAY SOFTWARE EO or give up 2.93% of portfolio value over 90 days.
Time Period3 Months [change]
DirectionMoves Together 
StrengthWeak
Accuracy100.0%
ValuesDaily Returns

AXWAY SOFTWARE EO  vs.  H M Hennes

 Performance 
       Timeline  
AXWAY SOFTWARE EO 

Risk-Adjusted Performance

7 of 100

 
Weak
 
Strong
OK
Compared to the overall equity markets, risk-adjusted returns on investments in AXWAY SOFTWARE EO are ranked lower than 7 (%) of all global equities and portfolios over the last 90 days. Despite nearly fragile basic indicators, AXWAY SOFTWARE may actually be approaching a critical reversion point that can send shares even higher in February 2025.
H M Hennes 

Risk-Adjusted Performance

4 of 100

 
Weak
 
Strong
Insignificant
Compared to the overall equity markets, risk-adjusted returns on investments in H M Hennes are ranked lower than 4 (%) of all global equities and portfolios over the last 90 days. In spite of rather fragile fundamental drivers, H M may actually be approaching a critical reversion point that can send shares even higher in February 2025.

AXWAY SOFTWARE and H M Volatility Contrast

   Predicted Return Density   
       Returns  

Pair Trading with AXWAY SOFTWARE and H M

The main advantage of trading using opposite AXWAY SOFTWARE and H M positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if AXWAY SOFTWARE position performs unexpectedly, H M 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 H M will offset losses from the drop in H M's long position.
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The idea behind AXWAY SOFTWARE EO and H M Hennes pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.
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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 Risk-Return Analysis module to view associations between returns expected from investment and the risk you assume.

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