Correlation Between Axway Software and Chrysalis Investments

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

Diversification Opportunities for Axway Software and Chrysalis Investments

-0.59

Correlation Coefficient

Axway Software  Chrysalis Investments

Excellent diversification

The 3 months correlation between Axway and Chrysalis is -0.59. Overlapping area represents the amount of risk that can be diversified away by holding Axway Software SA and Chrysalis Investments in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Chrysalis Investments 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 Chrysalis Investments. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Chrysalis Investments has no effect on the direction of Axway Software i.e., Axway Software and Chrysalis Investments go up and down completely randomly.

Pair Corralation between Axway Software and Chrysalis Investments

Assuming the 90 days trading horizon Axway Software SA is expected to generate 0.84 times more return on investment than Chrysalis Investments. However, Axway Software SA is 1.19 times less risky than Chrysalis Investments. It trades about 0.22 of its potential returns per unit of risk. Chrysalis Investments is currently generating about -0.09 per unit of risk. If you would invest  2,690  in Axway Software SA on December 23, 2024 and sell it today you would earn a total of  530.00  from holding Axway Software SA or generate 19.7% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Very Weak
Accuracy	100.0%
Values	Daily Returns

Axway Software SA  vs.  Chrysalis Investments

Axway Software SA

Risk-Adjusted Performance

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in Axway Software SA are ranked lower than 17 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively uncertain basic indicators, Axway Software unveiled solid returns over the last few months and may actually be approaching a breakup point.

Chrysalis Investments

Risk-Adjusted Performance

Very Weak

Over the last 90 days Chrysalis Investments has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of latest uncertain performance, the Stock's basic indicators remain stable and the newest uproar on Wall Street may also be a sign of mid-term gains for the firm private investors.

Pair Trading with Axway Software and Chrysalis Investments

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

The idea behind Axway Software SA and Chrysalis Investments 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 Funds Screener module to find actively-traded funds from around the world traded on over 30 global exchanges.