Correlation Between Axway Software and Carlsberg A/S

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

By analyzing existing cross correlation between Axway Software SA and Carlsberg AS, you can compare the effects of market volatilities on Axway Software and Carlsberg A/S 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 Carlsberg A/S. Check out your portfolio center. Please also check ongoing floating volatility patterns of Axway Software and Carlsberg A/S.

Diversification Opportunities for Axway Software and Carlsberg A/S

-0.75

Correlation Coefficient

Axway Software  Carlsberg A/S

Pay attention - limited upside

The 3 months correlation between Axway and Carlsberg is -0.75. Overlapping area represents the amount of risk that can be diversified away by holding Axway Software SA and Carlsberg AS in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Carlsberg A/S 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 SA are associated (or correlated) with Carlsberg A/S. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Carlsberg A/S has no effect on the direction of Axway Software i.e., Axway Software and Carlsberg A/S go up and down completely randomly.

Pair Corralation between Axway Software and Carlsberg A/S

Assuming the 90 days trading horizon Axway Software SA is expected to generate 1.29 times more return on investment than Carlsberg A/S. However, Axway Software is 1.29 times more volatile than Carlsberg AS. It trades about -0.1 of its potential returns per unit of risk. Carlsberg AS is currently generating about -0.19 per unit of risk. If you would invest  2,680  in Axway Software SA on October 8, 2024 and sell it today you would lose (60.00) from holding Axway Software SA or give up 2.24% of portfolio value over 90 days.

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

Axway Software SA  vs.  Carlsberg AS

Axway Software SA

Risk-Adjusted Performance

9 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Axway Software SA are ranked lower than 9 (%) 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.

Carlsberg A/S

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Carlsberg AS has generated negative risk-adjusted returns adding no value to investors with long positions. Despite latest fragile performance, the Stock's technical and fundamental 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 Carlsberg A/S

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

The idea behind Axway Software SA and Carlsberg AS 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 Odds Of Bankruptcy module to get analysis of equity chance of financial distress in the next 2 years.