Correlation Between Axway Software and China Resources
Can any of the company-specific risk be diversified away by investing in both Axway Software and China Resources 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 China Resources 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 China Resources Power, you can compare the effects of market volatilities on Axway Software and China Resources 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 China Resources. Check out your portfolio center. Please also check ongoing floating volatility patterns of Axway Software and China Resources.
Diversification Opportunities for Axway Software and China Resources
0.39 | Correlation Coefficient |
Weak diversification
The 3 months correlation between Axway and China is 0.39. Overlapping area represents the amount of risk that can be diversified away by holding Axway Software SA and China Resources Power in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on China Resources Power 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 China Resources. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of China Resources Power has no effect on the direction of Axway Software i.e., Axway Software and China Resources go up and down completely randomly.
Pair Corralation between Axway Software and China Resources
Assuming the 90 days trading horizon Axway Software SA is expected to generate 0.96 times more return on investment than China Resources. However, Axway Software SA is 1.04 times less risky than China Resources. It trades about -0.04 of its potential returns per unit of risk. China Resources Power is currently generating about -0.41 per unit of risk. If you would invest 2,690 in Axway Software SA on October 29, 2024 and sell it today you would lose (30.00) from holding Axway Software SA or give up 1.12% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Axway Software SA vs. China Resources Power
Performance |
| Timeline |
| Axway Software SA |
| China Resources Power |
Axway Software and China Resources Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Axway Software and China Resources
The main advantage of trading using opposite Axway Software and China Resources positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Axway Software position performs unexpectedly, China Resources 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 China Resources will offset losses from the drop in China Resources' long position.| Axway Software vs. SCANDMEDICAL SOLDK 040 | Axway Software vs. Peijia Medical Limited | Axway Software vs. Japan Medical Dynamic | Axway Software vs. H2O Retailing |
| China Resources vs. Minerals Technologies | China Resources vs. Allegheny Technologies Incorporated | China Resources vs. Easy Software AG | China Resources vs. BioNTech SE |
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 Dashboard module to portfolio dashboard that provides centralized access to all your investments.
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