Correlation Between Crosswood and Axway Software
Can any of the company-specific risk be diversified away by investing in both Crosswood 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 Crosswood and Axway Software into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Crosswood and Axway Software, you can compare the effects of market volatilities on Crosswood 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 Crosswood with a short position of Axway Software. Check out your portfolio center. Please also check ongoing floating volatility patterns of Crosswood and Axway Software.
Diversification Opportunities for Crosswood and Axway Software
0.3 | Correlation Coefficient |
Weak diversification
The 3 months correlation between Crosswood and Axway is 0.3. Overlapping area represents the amount of risk that can be diversified away by holding Crosswood and Axway Software in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Axway Software and Crosswood 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 Crosswood 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 has no effect on the direction of Crosswood i.e., Crosswood and Axway Software go up and down completely randomly.
Pair Corralation between Crosswood and Axway Software
Assuming the 90 days trading horizon Crosswood is expected to generate 5.56 times more return on investment than Axway Software. However, Crosswood is 5.56 times more volatile than Axway Software. It trades about 0.01 of its potential returns per unit of risk. Axway Software is currently generating about -0.02 per unit of risk. If you would invest 885.00 in Crosswood on August 29, 2024 and sell it today you would lose (10.00) from holding Crosswood or give up 1.13% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 95.65% |
| Values | Daily Returns |
Crosswood vs. Axway Software
Performance |
| Timeline |
| Crosswood |
| Axway Software |
Crosswood and Axway Software Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Crosswood and Axway Software
The main advantage of trading using opposite Crosswood and Axway Software positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Crosswood 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.| Crosswood vs. Axway Software | Crosswood vs. Metalliance SA | Crosswood vs. Jacquet Metal Service | Crosswood vs. Linedata Services SA |
| 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 Pattern Recognition module to use different Pattern Recognition models to time the market across multiple global exchanges.
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