Correlation Between Axway Software and Acticor Biotech
Can any of the company-specific risk be diversified away by investing in both Axway Software and Acticor Biotech 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 Acticor Biotech into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Axway Software and Acticor Biotech SAS, you can compare the effects of market volatilities on Axway Software and Acticor Biotech 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 Acticor Biotech. Check out your portfolio center. Please also check ongoing floating volatility patterns of Axway Software and Acticor Biotech.
Diversification Opportunities for Axway Software and Acticor Biotech
-0.13 | Correlation Coefficient |
Good diversification
The 3 months correlation between Axway and Acticor is -0.13. Overlapping area represents the amount of risk that can be diversified away by holding Axway Software and Acticor Biotech SAS in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Acticor Biotech SAS 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 are associated (or correlated) with Acticor Biotech. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Acticor Biotech SAS has no effect on the direction of Axway Software i.e., Axway Software and Acticor Biotech go up and down completely randomly.
Pair Corralation between Axway Software and Acticor Biotech
Assuming the 90 days trading horizon Axway Software is expected to generate 0.07 times more return on investment than Acticor Biotech. However, Axway Software is 14.42 times less risky than Acticor Biotech. It trades about 0.28 of its potential returns per unit of risk. Acticor Biotech SAS is currently generating about 0.02 per unit of risk. If you would invest 2,260 in Axway Software on September 12, 2024 and sell it today you would earn a total of 490.00 from holding Axway Software or generate 21.68% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 98.46% |
| Values | Daily Returns |
Axway Software vs. Acticor Biotech SAS
Performance |
| Timeline |
| Axway Software |
| Acticor Biotech SAS |
Axway Software and Acticor Biotech Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Axway Software and Acticor Biotech
The main advantage of trading using opposite Axway Software and Acticor Biotech positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Axway Software position performs unexpectedly, Acticor Biotech 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 Acticor Biotech will offset losses from the drop in Acticor Biotech's long position.The idea behind Axway Software and Acticor Biotech SAS pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.| Acticor Biotech vs. Pullup Entertainment Socit | Acticor Biotech vs. Les Hotels Bav | Acticor Biotech vs. Fill Up Media | Acticor Biotech vs. Hotel Majestic Cannes |
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 Diagnostics module to use generated alerts and portfolio events aggregator to diagnose current holdings.
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