Correlation Between Axway Software and Aptitude Software

Can any of the company-specific risk be diversified away by investing in both Axway Software and Aptitude 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 Axway Software and Aptitude Software 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 Aptitude Software Group, you can compare the effects of market volatilities on Axway Software and Aptitude 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 Axway Software with a short position of Aptitude Software. Check out your portfolio center. Please also check ongoing floating volatility patterns of Axway Software and Aptitude Software.

Diversification Opportunities for Axway Software and Aptitude Software

-0.04

Correlation Coefficient

Axway Software  Aptitude Software

Good diversification

The 3 months correlation between Axway and Aptitude is -0.04. Overlapping area represents the amount of risk that can be diversified away by holding Axway Software SA and Aptitude Software Group in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Aptitude Software 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 Aptitude Software. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Aptitude Software has no effect on the direction of Axway Software i.e., Axway Software and Aptitude Software go up and down completely randomly.

Pair Corralation between Axway Software and Aptitude Software

Assuming the 90 days trading horizon Axway Software SA is expected to under-perform the Aptitude Software. But the stock apears to be less risky and, when comparing its historical volatility, Axway Software SA is 2.45 times less risky than Aptitude Software. The stock trades about -0.16 of its potential returns per unit of risk. The Aptitude Software Group is currently generating about 0.03 of returns per unit of risk over similar time horizon. If you would invest  33,200  in Aptitude Software Group on October 8, 2024 and sell it today you would earn a total of  200.00  from holding Aptitude Software Group or generate 0.6% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Insignificant
Accuracy	94.44%
Values	Daily Returns

Axway Software SA  vs.  Aptitude Software Group

Axway Software SA

Risk-Adjusted Performance

11 of 100

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Axway Software SA are ranked lower than 11 (%) of all global equities and portfolios over the last 90 days. 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.

Aptitude Software

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Aptitude Software Group has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of comparatively stable basic indicators, Aptitude Software is not utilizing all of its potentials. The newest stock price uproar, may contribute to short-horizon losses for the private investors.

Pair Trading with Axway Software and Aptitude Software

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

The idea behind Axway Software SA and Aptitude Software Group 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.

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 Risk-Return Analysis module to view associations between returns expected from investment and the risk you assume.