Correlation Between AXA SA and Axway Software

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

By analyzing existing cross correlation between AXA SA and Axway Software SA, you can compare the effects of market volatilities on AXA SA and Axway Software 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 AXA SA with a short position of Axway Software. Check out your portfolio center. Please also check ongoing floating volatility patterns of AXA SA and Axway Software.

Diversification Opportunities for AXA SA and Axway Software

-0.32

Correlation Coefficient

AXA SA  Axway Software

Very good diversification

The 3 months correlation between AXA and Axway is -0.32. Overlapping area represents the amount of risk that can be diversified away by holding AXA SA and Axway Software SA in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Axway Software SA and AXA SA 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 AXA SA are associated (or correlated) with Axway Software. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Axway Software SA has no effect on the direction of AXA SA i.e., AXA SA and Axway Software go up and down completely randomly.

Pair Corralation between AXA SA and Axway Software

Assuming the 90 days trading horizon AXA SA is expected to generate 0.87 times more return on investment than Axway Software. However, AXA SA is 1.15 times less risky than Axway Software. It trades about 0.31 of its potential returns per unit of risk. Axway Software SA is currently generating about -0.03 per unit of risk. If you would invest  3,367  in AXA SA on October 24, 2024 and sell it today you would earn a total of  205.00  from holding AXA SA or generate 6.09% return on investment over 90 days.

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

AXA SA  vs.  Axway Software SA

AXA SA

Risk-Adjusted Performance

1 of 100

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in AXA SA are ranked lower than 1 (%) of all global equities and portfolios over the last 90 days. In spite of very healthy basic indicators, AXA SA is not utilizing all of its potentials. The current stock price disarray, may contribute to short-term losses for the investors.

Axway Software SA

Risk-Adjusted Performance

3 of 100

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in Axway Software SA are ranked lower than 3 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively stable basic indicators, Axway Software is not utilizing all of its potentials. The current stock price uproar, may contribute to short-horizon losses for the private investors.

Pair Trading with AXA SA and Axway Software

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

The idea behind AXA SA and Axway Software SA 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 Sync Your Broker module to sync your existing holdings, watchlists, positions or portfolios from thousands of online brokerage services, banks, investment account aggregators and robo-advisors..