Correlation Between Axway Software and DFS Furniture
Can any of the company-specific risk be diversified away by investing in both Axway Software and DFS Furniture 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 DFS Furniture 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 DFS Furniture PLC, you can compare the effects of market volatilities on Axway Software and DFS Furniture 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 DFS Furniture. Check out your portfolio center. Please also check ongoing floating volatility patterns of Axway Software and DFS Furniture.
Diversification Opportunities for Axway Software and DFS Furniture
0.75 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Axway and DFS is 0.75. Overlapping area represents the amount of risk that can be diversified away by holding Axway Software SA and DFS Furniture PLC in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on DFS Furniture PLC 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 DFS Furniture. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of DFS Furniture PLC has no effect on the direction of Axway Software i.e., Axway Software and DFS Furniture go up and down completely randomly.
Pair Corralation between Axway Software and DFS Furniture
Assuming the 90 days trading horizon Axway Software is expected to generate 2.15 times less return on investment than DFS Furniture. But when comparing it to its historical volatility, Axway Software SA is 1.36 times less risky than DFS Furniture. It trades about 0.05 of its potential returns per unit of risk. DFS Furniture PLC is currently generating about 0.08 of returns per unit of risk over similar time horizon. If you would invest 125.00 in DFS Furniture PLC on September 3, 2024 and sell it today you would earn a total of 37.00 from holding DFS Furniture PLC or generate 29.6% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Axway Software SA vs. DFS Furniture PLC
Performance |
| Timeline |
| Axway Software SA |
| DFS Furniture PLC |
Axway Software and DFS Furniture Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Axway Software and DFS Furniture
The main advantage of trading using opposite Axway Software and DFS Furniture positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Axway Software position performs unexpectedly, DFS Furniture 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 DFS Furniture will offset losses from the drop in DFS Furniture's long position.| Axway Software vs. Salesforce | Axway Software vs. Rocket Internet SE | Axway Software vs. Superior Plus Corp | Axway Software vs. NMI Holdings |
| DFS Furniture vs. ASURE SOFTWARE | DFS Furniture vs. Magic Software Enterprises | DFS Furniture vs. Axway Software SA | DFS Furniture vs. Lion Biotechnologies |
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 Volatility Analysis module to get historical volatility and risk analysis based on latest market data.
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