Correlation Between Sofina Socit and Axway Software
Can any of the company-specific risk be diversified away by investing in both Sofina Socit 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 Sofina Socit and Axway Software into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Sofina Socit Anonyme and Axway Software, you can compare the effects of market volatilities on Sofina Socit 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 Sofina Socit with a short position of Axway Software. Check out your portfolio center. Please also check ongoing floating volatility patterns of Sofina Socit and Axway Software.
Diversification Opportunities for Sofina Socit and Axway Software
-0.69 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Sofina and Axway is -0.69. Overlapping area represents the amount of risk that can be diversified away by holding Sofina Socit Anonyme and Axway Software in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Axway Software and Sofina Socit 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 Sofina Socit Anonyme 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 Sofina Socit i.e., Sofina Socit and Axway Software go up and down completely randomly.
Pair Corralation between Sofina Socit and Axway Software
Assuming the 90 days trading horizon Sofina Socit is expected to generate 3.74 times less return on investment than Axway Software. But when comparing it to its historical volatility, Sofina Socit Anonyme is 1.17 times less risky than Axway Software. It trades about 0.02 of its potential returns per unit of risk. Axway Software is currently generating about 0.06 of returns per unit of risk over similar time horizon. If you would invest 2,217 in Axway Software on September 4, 2024 and sell it today you would earn a total of 523.00 from holding Axway Software or generate 23.59% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Sofina Socit Anonyme vs. Axway Software
Performance |
| Timeline |
| Sofina Socit Anonyme |
| Axway Software |
Sofina Socit and Axway Software Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Sofina Socit and Axway Software
The main advantage of trading using opposite Sofina Socit and Axway Software positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Sofina Socit 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.| Sofina Socit vs. EVS Broadcast Equipment | Sofina Socit vs. Ion Beam Applications | Sofina Socit vs. Immolease Trust NV | Sofina Socit vs. Onward Medical NV |
| Axway Software vs. Melexis NV | Axway Software vs. ageas SANV | Axway Software vs. Sofina Socit Anonyme | Axway Software vs. Barco NV |
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 Portfolio Optimization module to compute new portfolio that will generate highest expected return given your specified tolerance for risk.
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