Correlation Between Axway Software and VIAPLAY GROUP

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

Diversification Opportunities for Axway Software and VIAPLAY GROUP

-0.46

Correlation Coefficient

Axway Software  VIAPLAY GROUP

Very good diversification

The 3 months correlation between Axway and VIAPLAY is -0.46. Overlapping area represents the amount of risk that can be diversified away by holding Axway Software SA and VIAPLAY GROUP AB in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on VIAPLAY GROUP AB 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 VIAPLAY GROUP. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of VIAPLAY GROUP AB has no effect on the direction of Axway Software i.e., Axway Software and VIAPLAY GROUP go up and down completely randomly.

Pair Corralation between Axway Software and VIAPLAY GROUP

Assuming the 90 days trading horizon Axway Software SA is expected to under-perform the VIAPLAY GROUP. But the stock apears to be less risky and, when comparing its historical volatility, Axway Software SA is 5.79 times less risky than VIAPLAY GROUP. The stock trades about -0.06 of its potential returns per unit of risk. The VIAPLAY GROUP AB is currently generating about 0.09 of returns per unit of risk over similar time horizon. If you would invest  5.53  in VIAPLAY GROUP AB on October 10, 2024 and sell it today you would earn a total of  0.40  from holding VIAPLAY GROUP AB or generate 7.23% return on investment over 90 days.

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

Axway Software SA  vs.  VIAPLAY GROUP AB

Axway Software SA

Risk-Adjusted Performance

8 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Axway Software SA are ranked lower than 8 (%) 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.

VIAPLAY GROUP AB

Risk-Adjusted Performance

3 of 100

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in VIAPLAY GROUP AB are ranked lower than 3 (%) of all global equities and portfolios over the last 90 days. Despite nearly fragile basic indicators, VIAPLAY GROUP reported solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Axway Software and VIAPLAY GROUP

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

The idea behind Axway Software SA and VIAPLAY GROUP AB 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 Equity Analysis module to research over 250,000 global equities including funds, stocks and ETFs to find investment opportunities.