Correlation Between Chocoladefabriken and Axway Software

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

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

Diversification Opportunities for Chocoladefabriken and Axway Software

-0.89

Correlation Coefficient

Chocoladefabriken  Axway Software

Pay attention - limited upside

The 3 months correlation between Chocoladefabriken and Axway is -0.89. Overlapping area represents the amount of risk that can be diversified away by holding Chocoladefabriken Lindt Spruen and Axway Software SA in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Axway Software SA and Chocoladefabriken 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 Chocoladefabriken Lindt Spruengli 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 SA has no effect on the direction of Chocoladefabriken i.e., Chocoladefabriken and Axway Software go up and down completely randomly.

Pair Corralation between Chocoladefabriken and Axway Software

Assuming the 90 days trading horizon Chocoladefabriken Lindt Spruengli is expected to generate 0.88 times more return on investment than Axway Software. However, Chocoladefabriken Lindt Spruengli is 1.13 times less risky than Axway Software. It trades about 0.02 of its potential returns per unit of risk. Axway Software SA is currently generating about -0.13 per unit of risk. If you would invest  9,980,000  in Chocoladefabriken Lindt Spruengli on October 5, 2024 and sell it today you would earn a total of  20,000  from holding Chocoladefabriken Lindt Spruengli or generate 0.2% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Significant
Accuracy	94.74%
Values	Daily Returns

Chocoladefabriken Lindt Spruen  vs.  Axway Software SA

Chocoladefabriken Lindt

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Chocoladefabriken Lindt Spruengli has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of latest unsteady 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.

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.

Pair Trading with Chocoladefabriken and Axway Software

The main advantage of trading using opposite Chocoladefabriken and Axway Software positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Chocoladefabriken 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.

The idea behind Chocoladefabriken Lindt Spruengli and Axway Software SA 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 Investing Opportunities module to build portfolios using our predefined set of ideas and optimize them against your investing preferences.