Correlation Between Natural Health and Axway Software
Can any of the company-specific risk be diversified away by investing in both Natural Health 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 Natural Health and Axway Software into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Natural Health Trends and Axway Software SA, you can compare the effects of market volatilities on Natural Health 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 Natural Health with a short position of Axway Software. Check out your portfolio center. Please also check ongoing floating volatility patterns of Natural Health and Axway Software.
Diversification Opportunities for Natural Health and Axway Software
-0.28 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Natural and Axway is -0.28. Overlapping area represents the amount of risk that can be diversified away by holding Natural Health Trends 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 Natural Health 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 Natural Health Trends 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 Natural Health i.e., Natural Health and Axway Software go up and down completely randomly.
Pair Corralation between Natural Health and Axway Software
Assuming the 90 days trading horizon Natural Health Trends is expected to under-perform the Axway Software. In addition to that, Natural Health is 3.77 times more volatile than Axway Software SA. It trades about -0.43 of its total potential returns per unit of risk. Axway Software SA is currently generating about -0.09 per unit of volatility. If you would invest 2,730 in Axway Software SA on September 13, 2024 and sell it today you would lose (40.00) from holding Axway Software SA or give up 1.47% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Natural Health Trends vs. Axway Software SA
Performance |
| Timeline |
| Natural Health Trends |
| Axway Software SA |
Natural Health and Axway Software Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Natural Health and Axway Software
The main advantage of trading using opposite Natural Health and Axway Software positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Natural Health 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.| Natural Health vs. Apple Inc | Natural Health vs. Apple Inc | Natural Health vs. Apple Inc | Natural Health vs. Apple Inc |
| Axway Software vs. Eidesvik Offshore ASA | Axway Software vs. SOLSTAD OFFSHORE NK | Axway Software vs. Axcelis Technologies | Axway Software vs. MOLSON RS BEVERAGE |
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 Valuation module to check real value of public entities based on technical and fundamental data.
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