Correlation Between AXWAY SOFTWARE and Gentex

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

Diversification Opportunities for AXWAY SOFTWARE and Gentex

0.51

Correlation Coefficient

AXWAY SOFTWARE  Gentex

Very weak diversification

The 3 months correlation between AXWAY and Gentex is 0.51. Overlapping area represents the amount of risk that can be diversified away by holding AXWAY SOFTWARE EO and Gentex in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Gentex 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 Gentex. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Gentex has no effect on the direction of AXWAY SOFTWARE i.e., AXWAY SOFTWARE and Gentex go up and down completely randomly.

Pair Corralation between AXWAY SOFTWARE and Gentex

Assuming the 90 days horizon AXWAY SOFTWARE EO is expected to generate 1.37 times more return on investment than Gentex. However, AXWAY SOFTWARE is 1.37 times more volatile than Gentex. It trades about 0.03 of its potential returns per unit of risk. Gentex is currently generating about -0.26 per unit of risk. If you would invest  2,700  in AXWAY SOFTWARE EO on October 27, 2024 and sell it today you would earn a total of  20.00  from holding AXWAY SOFTWARE EO or generate 0.74% return on investment over 90 days.

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

AXWAY SOFTWARE EO  vs.  Gentex

AXWAY SOFTWARE EO

Risk-Adjusted Performance

3 of 100

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in AXWAY SOFTWARE EO are ranked lower than 3 (%) of all global equities and portfolios over the last 90 days. Despite nearly stable basic indicators, AXWAY SOFTWARE is not utilizing all of its potentials. The current stock price disturbance, may contribute to mid-run losses for the stockholders.

Gentex

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Gentex has generated negative risk-adjusted returns adding no value to investors with long positions. Despite latest uncertain performance, the Stock's basic indicators remain stable and the current disturbance on Wall Street may also be a sign of long-run gains for the company stockholders.

Pair Trading with AXWAY SOFTWARE and Gentex

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

The idea behind AXWAY SOFTWARE EO and Gentex 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 Instant Ratings module to determine any equity ratings based on digital recommendations. Macroaxis instant equity ratings are based on combination of fundamental analysis and risk-adjusted market performance.