Correlation Between Futura Medical and Axway Software
Can any of the company-specific risk be diversified away by investing in both Futura Medical 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 Futura Medical and Axway Software into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Futura Medical and Axway Software SA, you can compare the effects of market volatilities on Futura Medical 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 Futura Medical with a short position of Axway Software. Check out your portfolio center. Please also check ongoing floating volatility patterns of Futura Medical and Axway Software.
Diversification Opportunities for Futura Medical and Axway Software
-0.1 | Correlation Coefficient |
Good diversification
The 3 months correlation between Futura and Axway is -0.1. Overlapping area represents the amount of risk that can be diversified away by holding Futura Medical 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 Futura Medical 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 Futura Medical 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 Futura Medical i.e., Futura Medical and Axway Software go up and down completely randomly.
Pair Corralation between Futura Medical and Axway Software
Assuming the 90 days trading horizon Futura Medical is expected to generate 139.12 times less return on investment than Axway Software. But when comparing it to its historical volatility, Futura Medical is 1.63 times less risky than Axway Software. It trades about 0.0 of its potential returns per unit of risk. Axway Software SA is currently generating about 0.06 of returns per unit of risk over similar time horizon. If you would invest 1,348 in Axway Software SA on August 30, 2024 and sell it today you would earn a total of 1,422 from holding Axway Software SA or generate 105.49% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 93.36% |
| Values | Daily Returns |
Futura Medical vs. Axway Software SA
Performance |
| Timeline |
| Futura Medical |
| Axway Software SA |
Futura Medical and Axway Software Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Futura Medical and Axway Software
The main advantage of trading using opposite Futura Medical and Axway Software positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Futura Medical 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.| Futura Medical vs. Samsung Electronics Co | Futura Medical vs. Samsung Electronics Co | Futura Medical vs. Hyundai Motor | Futura Medical vs. Toyota Motor Corp |
| Axway Software vs. Lendinvest PLC | Axway Software vs. Neometals | Axway Software vs. Albion Technology General | Axway Software vs. Jupiter Fund Management |
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 Equity Forecasting module to use basic forecasting models to generate price predictions and determine price momentum.
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