Correlation Between AXISCADES Technologies and Arrow Greentech

Can any of the company-specific risk be diversified away by investing in both AXISCADES Technologies and Arrow Greentech 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 AXISCADES Technologies and Arrow Greentech into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between AXISCADES Technologies Limited and Arrow Greentech Limited, you can compare the effects of market volatilities on AXISCADES Technologies and Arrow Greentech 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 AXISCADES Technologies with a short position of Arrow Greentech. Check out your portfolio center. Please also check ongoing floating volatility patterns of AXISCADES Technologies and Arrow Greentech.

Diversification Opportunities for AXISCADES Technologies and Arrow Greentech

-0.27

Correlation Coefficient

AXISCADES Technologies  Arrow Greentech

Very good diversification

The 3 months correlation between AXISCADES and Arrow is -0.27. Overlapping area represents the amount of risk that can be diversified away by holding AXISCADES Technologies Limited and Arrow Greentech Limited in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Arrow Greentech and AXISCADES Technologies 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 AXISCADES Technologies Limited are associated (or correlated) with Arrow Greentech. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Arrow Greentech has no effect on the direction of AXISCADES Technologies i.e., AXISCADES Technologies and Arrow Greentech go up and down completely randomly.

Pair Corralation between AXISCADES Technologies and Arrow Greentech

Assuming the 90 days trading horizon AXISCADES Technologies is expected to generate 1.77 times less return on investment than Arrow Greentech. But when comparing it to its historical volatility, AXISCADES Technologies Limited is 1.15 times less risky than Arrow Greentech. It trades about 0.06 of its potential returns per unit of risk. Arrow Greentech Limited is currently generating about 0.1 of returns per unit of risk over similar time horizon. If you would invest  18,816  in Arrow Greentech Limited on October 7, 2024 and sell it today you would earn a total of  61,174  from holding Arrow Greentech Limited or generate 325.12% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Insignificant
Accuracy	99.39%
Values	Daily Returns

AXISCADES Technologies Limited  vs.  Arrow Greentech Limited

AXISCADES Technologies

Risk-Adjusted Performance

13 of 100

Good

Compared to the overall equity markets, risk-adjusted returns on investments in AXISCADES Technologies Limited are ranked lower than 13 (%) of all global equities and portfolios over the last 90 days. In spite of rather uncertain fundamental indicators, AXISCADES Technologies exhibited solid returns over the last few months and may actually be approaching a breakup point.

Arrow Greentech

Risk-Adjusted Performance

3 of 100

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in Arrow Greentech Limited are ranked lower than 3 (%) of all global equities and portfolios over the last 90 days. Even with relatively uncertain technical and fundamental indicators, Arrow Greentech may actually be approaching a critical reversion point that can send shares even higher in February 2025.

Pair Trading with AXISCADES Technologies and Arrow Greentech

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

The idea behind AXISCADES Technologies Limited and Arrow Greentech Limited 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 Forecasting module to use basic forecasting models to generate price predictions and determine price momentum.