Correlation Between Axis Technologies and First Tractor

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

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

Diversification Opportunities for Axis Technologies and First Tractor

0.0

Correlation Coefficient

Axis Technologies  First Tractor

Pay attention - limited upside

The 3 months correlation between Axis and First is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding Axis Technologies Group and First Tractor in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on First Tractor and Axis 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 Axis Technologies Group are associated (or correlated) with First Tractor. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of First Tractor has no effect on the direction of Axis Technologies i.e., Axis Technologies and First Tractor go up and down completely randomly.

Pair Corralation between Axis Technologies and First Tractor

Given the investment horizon of 90 days Axis Technologies Group is expected to generate 15.9 times more return on investment than First Tractor. However, Axis Technologies is 15.9 times more volatile than First Tractor. It trades about 0.13 of its potential returns per unit of risk. First Tractor is currently generating about 0.04 per unit of risk. If you would invest  0.68  in Axis Technologies Group on September 5, 2024 and sell it today you would lose (0.02) from holding Axis Technologies Group or give up 2.94% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Flat
Strength	Insignificant
Accuracy	82.42%
Values	Daily Returns

Axis Technologies Group  vs.  First Tractor

Axis Technologies

Risk-Adjusted Performance

17 of 100

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in Axis Technologies Group are ranked lower than 17 (%) of all global equities and portfolios over the last 90 days. Despite nearly fragile basic indicators, Axis Technologies reported solid returns over the last few months and may actually be approaching a breakup point.

First Tractor

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days First Tractor has generated negative risk-adjusted returns adding no value to investors with long positions. Despite nearly stable basic indicators, First Tractor is not utilizing all of its potentials. The latest stock price disturbance, may contribute to mid-run losses for the stockholders.

Pair Trading with Axis Technologies and First Tractor

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

The idea behind Axis Technologies Group and First Tractor 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.

Check out your portfolio center.

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 Financial Widgets module to easily integrated Macroaxis content with over 30 different plug-and-play financial widgets.