Correlation Between Axway Software and Judges Scientific

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

Diversification Opportunities for Axway Software and Judges Scientific

0.22

Correlation Coefficient

Axway Software  Judges Scientific

Modest diversification

The 3 months correlation between Axway and Judges is 0.22. Overlapping area represents the amount of risk that can be diversified away by holding Axway Software SA and Judges Scientific Plc in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Judges Scientific 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 Judges Scientific. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Judges Scientific Plc has no effect on the direction of Axway Software i.e., Axway Software and Judges Scientific go up and down completely randomly.

Pair Corralation between Axway Software and Judges Scientific

Assuming the 90 days trading horizon Axway Software SA is expected to generate 0.39 times more return on investment than Judges Scientific. However, Axway Software SA is 2.57 times less risky than Judges Scientific. It trades about 0.0 of its potential returns per unit of risk. Judges Scientific Plc is currently generating about -0.39 per unit of risk. If you would invest  2,690  in Axway Software SA on October 26, 2024 and sell it today you would earn a total of  0.00  from holding Axway Software SA or generate 0.0% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Very Weak
Accuracy	95.0%
Values	Daily Returns

Axway Software SA  vs.  Judges Scientific Plc

Axway Software SA

Risk-Adjusted Performance

1 of 100

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in Axway Software SA are ranked lower than 1 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively stable basic indicators, Axway Software is not utilizing all of its potentials. The newest stock price uproar, may contribute to short-horizon losses for the private investors.

Judges Scientific Plc

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Judges Scientific Plc has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of uncertain performance in the last few months, the Stock's technical and fundamental indicators remain rather sound which may send shares a bit higher in February 2025. The latest tumult may also be a sign of longer-term up-swing for the firm shareholders.

Pair Trading with Axway Software and Judges Scientific

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

The idea behind Axway Software SA and Judges Scientific 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 Equity Search module to search for actively traded equities including funds and ETFs from over 30 global markets.