Correlation Between AXWAY SOFTWARE and Tsingtao Brewery

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

Diversification Opportunities for AXWAY SOFTWARE and Tsingtao Brewery

-0.62

Correlation Coefficient

AXWAY SOFTWARE  Tsingtao Brewery

Excellent diversification

The 3 months correlation between AXWAY and Tsingtao is -0.62. Overlapping area represents the amount of risk that can be diversified away by holding AXWAY SOFTWARE EO and Tsingtao Brewery in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Tsingtao Brewery 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 Tsingtao Brewery. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Tsingtao Brewery has no effect on the direction of AXWAY SOFTWARE i.e., AXWAY SOFTWARE and Tsingtao Brewery go up and down completely randomly.

Pair Corralation between AXWAY SOFTWARE and Tsingtao Brewery

Assuming the 90 days horizon AXWAY SOFTWARE EO is expected to under-perform the Tsingtao Brewery. In addition to that, AXWAY SOFTWARE is 1.01 times more volatile than Tsingtao Brewery. It trades about -0.06 of its total potential returns per unit of risk. Tsingtao Brewery is currently generating about 0.32 per unit of volatility. If you would invest  606.00  in Tsingtao Brewery on October 9, 2024 and sell it today you would earn a total of  54.00  from holding Tsingtao Brewery or generate 8.91% return on investment over 90 days.

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

AXWAY SOFTWARE EO  vs.  Tsingtao Brewery

AXWAY SOFTWARE EO

Risk-Adjusted Performance

7 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in AXWAY SOFTWARE EO are ranked lower than 7 (%) of all global equities and portfolios over the last 90 days. Despite nearly uncertain basic indicators, AXWAY SOFTWARE may actually be approaching a critical reversion point that can send shares even higher in February 2025.

Tsingtao Brewery

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Tsingtao Brewery has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of rather sound forward indicators, Tsingtao Brewery is not utilizing all of its potentials. The current stock price tumult, may contribute to shorter-term losses for the shareholders.

Pair Trading with AXWAY SOFTWARE and Tsingtao Brewery

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

The idea behind AXWAY SOFTWARE EO and Tsingtao Brewery 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 USA ETFs module to find actively traded Exchange Traded Funds (ETF) in USA.