Correlation Between Hilton Food and Axway Software
Can any of the company-specific risk be diversified away by investing in both Hilton Food 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 Hilton Food and Axway Software into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Hilton Food Group and Axway Software SA, you can compare the effects of market volatilities on Hilton Food 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 Hilton Food with a short position of Axway Software. Check out your portfolio center. Please also check ongoing floating volatility patterns of Hilton Food and Axway Software.
Diversification Opportunities for Hilton Food and Axway Software
0.4 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Hilton and Axway is 0.4. Overlapping area represents the amount of risk that can be diversified away by holding Hilton Food Group 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 Hilton Food 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 Hilton Food Group 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 Hilton Food i.e., Hilton Food and Axway Software go up and down completely randomly.
Pair Corralation between Hilton Food and Axway Software
Assuming the 90 days trading horizon Hilton Food is expected to generate 5.18 times less return on investment than Axway Software. In addition to that, Hilton Food is 1.07 times more volatile than Axway Software SA. It trades about 0.05 of its total potential returns per unit of risk. Axway Software SA is currently generating about 0.28 per unit of volatility. If you would invest 2,380 in Axway Software SA on August 31, 2024 and sell it today you would earn a total of 390.00 from holding Axway Software SA or generate 16.39% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Hilton Food Group vs. Axway Software SA
Performance |
| Timeline |
| Hilton Food Group |
| Axway Software SA |
Hilton Food and Axway Software Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Hilton Food and Axway Software
The main advantage of trading using opposite Hilton Food and Axway Software positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Hilton Food 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.| Hilton Food vs. Impax Environmental Markets | Hilton Food vs. Veolia Environnement VE | Hilton Food vs. United States Steel | Hilton Food vs. Ecclesiastical Insurance Office |
| Axway Software vs. Polar Capital Technology | Axway Software vs. Sabien Technology Group | Axway Software vs. Auction Technology Group | Axway Software vs. Check Point Software |
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 Piotroski F Score module to get Piotroski F Score based on the binary analysis strategy of nine different fundamentals.
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