Correlation Between AXWAY SOFTWARE and Steadfast Group
Can any of the company-specific risk be diversified away by investing in both AXWAY SOFTWARE and Steadfast 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 Steadfast Group into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between AXWAY SOFTWARE EO and Steadfast Group Limited, you can compare the effects of market volatilities on AXWAY SOFTWARE and Steadfast 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 Steadfast Group. Check out your portfolio center. Please also check ongoing floating volatility patterns of AXWAY SOFTWARE and Steadfast Group.
Diversification Opportunities for AXWAY SOFTWARE and Steadfast Group
0.28 | Correlation Coefficient |
Modest diversification
The 3 months correlation between AXWAY and Steadfast is 0.28. Overlapping area represents the amount of risk that can be diversified away by holding AXWAY SOFTWARE EO and Steadfast Group Limited in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Steadfast Group 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 EO are associated (or correlated) with Steadfast Group. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Steadfast Group has no effect on the direction of AXWAY SOFTWARE i.e., AXWAY SOFTWARE and Steadfast Group go up and down completely randomly.
Pair Corralation between AXWAY SOFTWARE and Steadfast Group
Assuming the 90 days horizon AXWAY SOFTWARE EO is expected to generate 1.59 times more return on investment than Steadfast Group. However, AXWAY SOFTWARE is 1.59 times more volatile than Steadfast Group Limited. It trades about -0.02 of its potential returns per unit of risk. Steadfast Group Limited is currently generating about -0.21 per unit of risk. If you would invest 2,670 in AXWAY SOFTWARE EO on October 10, 2024 and sell it today you would lose (20.00) from holding AXWAY SOFTWARE EO or give up 0.75% of portfolio value over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Together |
Strength | Very Weak |
Accuracy | 100.0% |
Values | Daily Returns |
AXWAY SOFTWARE EO vs. Steadfast Group Limited
Performance |
Timeline |
AXWAY SOFTWARE EO |
Steadfast Group |
AXWAY SOFTWARE and Steadfast Group Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with AXWAY SOFTWARE and Steadfast Group
The main advantage of trading using opposite AXWAY SOFTWARE and Steadfast Group positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if AXWAY SOFTWARE position performs unexpectedly, Steadfast 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 Steadfast Group will offset losses from the drop in Steadfast Group's long position.AXWAY SOFTWARE vs. Sunny Optical Technology | AXWAY SOFTWARE vs. X FAB Silicon Foundries | AXWAY SOFTWARE vs. Harmony Gold Mining | AXWAY SOFTWARE vs. Perseus Mining Limited |
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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 Idea Analyzer module to analyze all characteristics, volatility and risk-adjusted return of Macroaxis ideas.
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