Correlation Between Axway Software and Alfa Financial
Can any of the company-specific risk be diversified away by investing in both Axway Software and Alfa Financial 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 Alfa Financial into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Axway Software SA and Alfa Financial Software, you can compare the effects of market volatilities on Axway Software and Alfa Financial 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 Alfa Financial. Check out your portfolio center. Please also check ongoing floating volatility patterns of Axway Software and Alfa Financial.
Diversification Opportunities for Axway Software and Alfa Financial
0.59 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Axway and Alfa is 0.59. Overlapping area represents the amount of risk that can be diversified away by holding Axway Software SA and Alfa Financial Software in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Alfa Financial Software 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 SA are associated (or correlated) with Alfa Financial. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Alfa Financial Software has no effect on the direction of Axway Software i.e., Axway Software and Alfa Financial go up and down completely randomly.
Pair Corralation between Axway Software and Alfa Financial
Assuming the 90 days trading horizon Axway Software SA is expected to generate 1.08 times more return on investment than Alfa Financial. However, Axway Software is 1.08 times more volatile than Alfa Financial Software. It trades about -0.16 of its potential returns per unit of risk. Alfa Financial Software is currently generating about -0.25 per unit of risk. If you would invest 2,690 in Axway Software SA on October 30, 2024 and sell it today you would lose (120.00) from holding Axway Software SA or give up 4.46% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Axway Software SA vs. Alfa Financial Software
Performance |
| Timeline |
| Axway Software SA |
| Alfa Financial Software |
Axway Software and Alfa Financial Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Axway Software and Alfa Financial
The main advantage of trading using opposite Axway Software and Alfa Financial positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Axway Software position performs unexpectedly, Alfa Financial 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 Alfa Financial will offset losses from the drop in Alfa Financial's long position.| Axway Software vs. TOMBADOR IRON LTD | Axway Software vs. CHAMPION IRON | Axway Software vs. STRAYER EDUCATION | Axway Software vs. IDP EDUCATION LTD |
| Alfa Financial vs. Apple Inc | Alfa Financial vs. Apple Inc | Alfa Financial vs. Apple Inc | Alfa Financial vs. Apple Inc |
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 Search module to search for actively traded equities including funds and ETFs from over 30 global markets.
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