Correlation Between Caseys General and Axway Software
Can any of the company-specific risk be diversified away by investing in both Caseys 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 Caseys 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 Caseys General Stores and Axway Software SA, you can compare the effects of market volatilities on Caseys 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 Caseys General with a short position of Axway Software. Check out your portfolio center. Please also check ongoing floating volatility patterns of Caseys General and Axway Software.
Diversification Opportunities for Caseys General and Axway Software
0.72 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Caseys and Axway is 0.72. Overlapping area represents the amount of risk that can be diversified away by holding Caseys General Stores 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 Caseys 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 Caseys General Stores 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 Caseys General i.e., Caseys General and Axway Software go up and down completely randomly.
Pair Corralation between Caseys General and Axway Software
Assuming the 90 days trading horizon Caseys General Stores is expected to generate 0.86 times more return on investment than Axway Software. However, Caseys General Stores is 1.16 times less risky than Axway Software. It trades about 0.08 of its potential returns per unit of risk. Axway Software SA is currently generating about 0.05 per unit of risk. If you would invest 20,527 in Caseys General Stores on October 14, 2024 and sell it today you would earn a total of 17,073 from holding Caseys General Stores or generate 83.17% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Caseys General Stores vs. Axway Software SA
Performance |
| Timeline |
| Caseys General Stores |
| Axway Software SA |
Caseys General and Axway Software Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Caseys General and Axway Software
The main advantage of trading using opposite Caseys General and Axway Software positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Caseys 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.| Caseys General vs. Summit Hotel Properties | Caseys General vs. Teradata Corp | Caseys General vs. UNITED UTILITIES GR | Caseys General vs. MHP Hotel AG |
| Axway Software vs. Caseys General Stores | Axway Software vs. Altair Engineering | Axway Software vs. FAIR ISAAC | Axway Software vs. PICKN PAY STORES |
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 Performance Analysis module to check effects of mean-variance optimization against your current asset allocation.
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