Correlation Between Canadian General and Axway Software
Can any of the company-specific risk be diversified away by investing in both Canadian General and Axway Software 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 Canadian General and Axway Software into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Canadian General Investments and Axway Software SA, you can compare the effects of market volatilities on Canadian General and Axway Software 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 Canadian General with a short position of Axway Software. Check out your portfolio center. Please also check ongoing floating volatility patterns of Canadian General and Axway Software.
Diversification Opportunities for Canadian General and Axway Software
0.34 | Correlation Coefficient |
Weak diversification
The 3 months correlation between Canadian and Axway is 0.34. Overlapping area represents the amount of risk that can be diversified away by holding Canadian General Investments and Axway Software SA in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Axway Software SA and Canadian General 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 Canadian General Investments are associated (or correlated) with Axway Software. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Axway Software SA has no effect on the direction of Canadian General i.e., Canadian General and Axway Software go up and down completely randomly.
Pair Corralation between Canadian General and Axway Software
Assuming the 90 days trading horizon Canadian General Investments is expected to under-perform the Axway Software. In addition to that, Canadian General is 1.65 times more volatile than Axway Software SA. It trades about -0.04 of its total potential returns per unit of risk. Axway Software SA is currently generating about -0.02 per unit of volatility. If you would invest 2,680 in Axway Software SA on November 9, 2024 and sell it today you would lose (20.00) from holding Axway Software SA or give up 0.75% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 77.27% |
| Values | Daily Returns |
Canadian General Investments vs. Axway Software SA
Performance |
| Timeline |
| Canadian General Inv |
| Axway Software SA |
Risk-Adjusted Performance
Very Weak
Weak | Strong |
Canadian General and Axway Software Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Canadian General and Axway Software
The main advantage of trading using opposite Canadian General and Axway Software positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Canadian General position performs unexpectedly, Axway Software 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 Axway Software will offset losses from the drop in Axway Software's long position.| Canadian General vs. UNIQA Insurance Group | Canadian General vs. Sabre Insurance Group | Canadian General vs. Zurich Insurance Group | Canadian General vs. International Consolidated Airlines |
| Axway Software vs. Berkshire Hathaway | Axway Software vs. Samsung Electronics Co | Axway Software vs. Samsung Electronics Co | Axway Software vs. Samsung Electronics Co |
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 Price Transformation module to use Price Transformation models to analyze the depth of different equity instruments across global markets.
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