Correlation Between Axway Software and Encavis AG
Can any of the company-specific risk be diversified away by investing in both Axway Software and Encavis AG 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 Encavis AG 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 Encavis AG, you can compare the effects of market volatilities on Axway Software and Encavis AG 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 Encavis AG. Check out your portfolio center. Please also check ongoing floating volatility patterns of Axway Software and Encavis AG.
Diversification Opportunities for Axway Software and Encavis AG
0.11 | Correlation Coefficient |
Average diversification
The 3 months correlation between Axway and Encavis is 0.11. Overlapping area represents the amount of risk that can be diversified away by holding Axway Software SA and Encavis AG in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Encavis AG 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 Encavis AG. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Encavis AG has no effect on the direction of Axway Software i.e., Axway Software and Encavis AG go up and down completely randomly.
Pair Corralation between Axway Software and Encavis AG
Assuming the 90 days trading horizon Axway Software SA is expected to generate 0.88 times more return on investment than Encavis AG. However, Axway Software SA is 1.14 times less risky than Encavis AG. It trades about 0.06 of its potential returns per unit of risk. Encavis AG is currently generating about 0.0 per unit of risk. If you would invest 1,622 in Axway Software SA on September 12, 2024 and sell it today you would earn a total of 1,088 from holding Axway Software SA or generate 67.08% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Axway Software SA vs. Encavis AG
Performance |
| Timeline |
| Axway Software SA |
| Encavis AG |
Axway Software and Encavis AG Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Axway Software and Encavis AG
The main advantage of trading using opposite Axway Software and Encavis AG positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Axway Software position performs unexpectedly, Encavis AG 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 Encavis AG will offset losses from the drop in Encavis AG's long position.| Axway Software vs. GUARDANT HEALTH CL | Axway Software vs. Natural Health Trends | Axway Software vs. Sabra Health Care | Axway Software vs. ATRYS HEALTH SA |
| Encavis AG vs. ALERION CLEANPOWER | Encavis AG vs. PNE AG | Encavis AG vs. Lyxor 1 | Encavis AG vs. Xtrackers ShortDAX |
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 Economic Indicators module to top statistical indicators that provide insights into how an economy is performing.
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