Correlation Between Axway Software and Aptamer Group

Can any of the company-specific risk be diversified away by investing in both Axway Software and Aptamer Group 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 Axway Software and Aptamer Group into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between Axway Software SA and Aptamer Group PLC, you can compare the effects of market volatilities on Axway Software and Aptamer Group 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 Axway Software with a short position of Aptamer Group. Check out your portfolio center. Please also check ongoing floating volatility patterns of Axway Software and Aptamer Group.

Diversification Opportunities for Axway Software and Aptamer Group

0.76

Correlation Coefficient

Axway Software  Aptamer Group

Poor diversification

The 3 months correlation between Axway and Aptamer is 0.76. Overlapping area represents the amount of risk that can be diversified away by holding Axway Software SA and Aptamer Group PLC in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Aptamer Group PLC and Axway Software 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 Axway Software SA are associated (or correlated) with Aptamer Group. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Aptamer Group PLC has no effect on the direction of Axway Software i.e., Axway Software and Aptamer Group go up and down completely randomly.

Pair Corralation between Axway Software and Aptamer Group

Assuming the 90 days trading horizon Axway Software SA is expected to generate 0.25 times more return on investment than Aptamer Group. However, Axway Software SA is 3.99 times less risky than Aptamer Group. It trades about -0.21 of its potential returns per unit of risk. Aptamer Group PLC is currently generating about -0.16 per unit of risk. If you would invest  2,750  in Axway Software SA on October 13, 2024 and sell it today you would lose (70.00) from holding Axway Software SA or give up 2.55% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Significant
Accuracy	73.68%
Values	Daily Returns

Axway Software SA  vs.  Aptamer Group PLC

Axway Software SA

Risk-Adjusted Performance

0 of 100

Good

Over the last 90 days Axway Software SA has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of comparatively uncertain basic indicators, Axway Software may actually be approaching a critical reversion point that can send shares even higher in February 2025.

Aptamer Group PLC

Risk-Adjusted Performance

13 of 100

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Aptamer Group PLC are ranked lower than 13 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively unsteady basic indicators, Aptamer Group unveiled solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Axway Software and Aptamer Group

The main advantage of trading using opposite Axway Software and Aptamer Group positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Axway Software position performs unexpectedly, Aptamer Group 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 Aptamer Group will offset losses from the drop in Aptamer Group's long position.

The idea behind Axway Software SA and Aptamer Group PLC pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.

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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 Share Portfolio module to track or share privately all of your investments from the convenience of any device.