Correlation Between Axway Software and Fuji Media
Can any of the company-specific risk be diversified away by investing in both Axway Software and Fuji Media 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 Fuji Media 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 Fuji Media Holdings, you can compare the effects of market volatilities on Axway Software and Fuji Media 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 Fuji Media. Check out your portfolio center. Please also check ongoing floating volatility patterns of Axway Software and Fuji Media.
Diversification Opportunities for Axway Software and Fuji Media
-0.42 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Axway and Fuji is -0.42. Overlapping area represents the amount of risk that can be diversified away by holding Axway Software SA and Fuji Media Holdings in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Fuji Media Holdings 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 Fuji Media. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Fuji Media Holdings has no effect on the direction of Axway Software i.e., Axway Software and Fuji Media go up and down completely randomly.
Pair Corralation between Axway Software and Fuji Media
Assuming the 90 days trading horizon Axway Software is expected to generate 17.47 times less return on investment than Fuji Media. But when comparing it to its historical volatility, Axway Software SA is 4.26 times less risky than Fuji Media. It trades about 0.09 of its potential returns per unit of risk. Fuji Media Holdings is currently generating about 0.39 of returns per unit of risk over similar time horizon. If you would invest 1,030 in Fuji Media Holdings on November 7, 2024 and sell it today you would earn a total of 490.00 from holding Fuji Media Holdings or generate 47.57% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Axway Software SA vs. Fuji Media Holdings
Performance |
| Timeline |
| Axway Software SA |
| Fuji Media Holdings |
Axway Software and Fuji Media Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Axway Software and Fuji Media
The main advantage of trading using opposite Axway Software and Fuji Media positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Axway Software position performs unexpectedly, Fuji Media 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 Fuji Media will offset losses from the drop in Fuji Media's long position.| Axway Software vs. CarsalesCom | Axway Software vs. MPH Health Care | Axway Software vs. Brockhaus Capital Management | Axway Software vs. BOS BETTER ONLINE |
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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 Watchlist Optimization module to optimize watchlists to build efficient portfolios or rebalance existing positions based on the mean-variance optimization algorithm.
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