Correlation Between AXWAY SOFTWARE and Kingdee International

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

Diversification Opportunities for AXWAY SOFTWARE and Kingdee International

-0.1

Correlation Coefficient

AXWAY SOFTWARE  Kingdee International

Good diversification

The 3 months correlation between AXWAY and Kingdee is -0.1. Overlapping area represents the amount of risk that can be diversified away by holding AXWAY SOFTWARE EO and Kingdee International Software in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Kingdee International 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 Kingdee International. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Kingdee International has no effect on the direction of AXWAY SOFTWARE i.e., AXWAY SOFTWARE and Kingdee International go up and down completely randomly.

Pair Corralation between AXWAY SOFTWARE and Kingdee International

Assuming the 90 days horizon AXWAY SOFTWARE EO is expected to under-perform the Kingdee International. But the stock apears to be less risky and, when comparing its historical volatility, AXWAY SOFTWARE EO is 3.15 times less risky than Kingdee International. The stock trades about -0.1 of its potential returns per unit of risk. The Kingdee International Software is currently generating about -0.01 of returns per unit of risk over similar time horizon. If you would invest  102.00  in Kingdee International Software on October 7, 2024 and sell it today you would lose (4.00) from holding Kingdee International Software or give up 3.92% of portfolio value over 90 days.

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

AXWAY SOFTWARE EO  vs.  Kingdee International Software

AXWAY SOFTWARE EO

Risk-Adjusted Performance

8 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in AXWAY SOFTWARE EO are ranked lower than 8 (%) of all global equities and portfolios over the last 90 days. Despite nearly unsteady basic indicators, AXWAY SOFTWARE may actually be approaching a critical reversion point that can send shares even higher in February 2025.

Kingdee International

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Kingdee International Software has generated negative risk-adjusted returns adding no value to investors with long positions. Despite fragile performance in the last few months, the Stock's forward indicators remain nearly stable which may send shares a bit higher in February 2025. The current disturbance may also be a sign of long-run up-swing for the company stockholders.

Pair Trading with AXWAY SOFTWARE and Kingdee International

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

The idea behind AXWAY SOFTWARE EO and Kingdee International Software 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 CEOs Directory module to screen CEOs from public companies around the world.