Correlation Between Axway Software and Soditech
Can any of the company-specific risk be diversified away by investing in both Axway Software and Soditech 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 Soditech into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Axway Software and Soditech SA, you can compare the effects of market volatilities on Axway Software and Soditech 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 Soditech. Check out your portfolio center. Please also check ongoing floating volatility patterns of Axway Software and Soditech.
Diversification Opportunities for Axway Software and Soditech
0.01 | Correlation Coefficient |
Significant diversification
The 3 months correlation between Axway and Soditech is 0.01. Overlapping area represents the amount of risk that can be diversified away by holding Axway Software and Soditech SA in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Soditech SA 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 Soditech. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Soditech SA has no effect on the direction of Axway Software i.e., Axway Software and Soditech go up and down completely randomly.
Pair Corralation between Axway Software and Soditech
Assuming the 90 days trading horizon Axway Software is expected to generate 2.06 times more return on investment than Soditech. However, Axway Software is 2.06 times more volatile than Soditech SA. It trades about -0.06 of its potential returns per unit of risk. Soditech SA is currently generating about -0.29 per unit of risk. If you would invest 2,780 in Axway Software on August 30, 2024 and sell it today you would lose (30.00) from holding Axway Software or give up 1.08% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 95.65% |
| Values | Daily Returns |
Axway Software vs. Soditech SA
Performance |
| Timeline |
| Axway Software |
| Soditech SA |
Axway Software and Soditech Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Axway Software and Soditech
The main advantage of trading using opposite Axway Software and Soditech positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Axway Software position performs unexpectedly, Soditech 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 Soditech will offset losses from the drop in Soditech's long position.| Axway Software vs. Aubay Socit Anonyme | Axway Software vs. Infotel SA | Axway Software vs. IT Link | Axway Software vs. Manitou BF SA |
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 Positions Ratings module to determine portfolio positions ratings based on digital equity recommendations. Macroaxis instant position ratings are based on combination of fundamental analysis and risk-adjusted market performance.
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