Correlation Between Axis Technologies and Jefferies Financial

Can any of the company-specific risk be diversified away by investing in both Axis Technologies and Jefferies Financial 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 Jefferies Financial 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 Jefferies Financial Group, you can compare the effects of market volatilities on Axis Technologies and Jefferies Financial 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 Jefferies Financial. Check out your portfolio center. Please also check ongoing floating volatility patterns of Axis Technologies and Jefferies Financial.

Diversification Opportunities for Axis Technologies and Jefferies Financial

0.3

Correlation Coefficient

Axis Technologies  Jefferies Financial

Weak diversification

The 3 months correlation between Axis and Jefferies is 0.3. Overlapping area represents the amount of risk that can be diversified away by holding Axis Technologies Group and Jefferies Financial Group in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Jefferies Financial 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 Jefferies Financial. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Jefferies Financial has no effect on the direction of Axis Technologies i.e., Axis Technologies and Jefferies Financial go up and down completely randomly.

Pair Corralation between Axis Technologies and Jefferies Financial

Given the investment horizon of 90 days Axis Technologies Group is expected to generate 34.46 times more return on investment than Jefferies Financial. However, Axis Technologies is 34.46 times more volatile than Jefferies Financial Group. It trades about 0.12 of its potential returns per unit of risk. Jefferies Financial Group is currently generating about 0.07 per unit of risk. If you would invest  0.14  in Axis Technologies Group on October 11, 2024 and sell it today you would lose (0.08) from holding Axis Technologies Group or give up 57.14% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Very Weak
Accuracy	95.45%
Values	Daily Returns

Axis Technologies Group  vs.  Jefferies Financial Group

Axis Technologies

Risk-Adjusted Performance

18 of 100

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in Axis Technologies Group are ranked lower than 18 (%) of all global equities and portfolios over the last 90 days. Despite nearly uncertain basic indicators, Axis Technologies reported solid returns over the last few months and may actually be approaching a breakup point.

Jefferies Financial

Risk-Adjusted Performance

15 of 100

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Jefferies Financial Group are ranked lower than 15 (%) of all global equities and portfolios over the last 90 days. Despite nearly weak technical and fundamental indicators, Jefferies Financial reported solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Axis Technologies and Jefferies Financial

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

The idea behind Axis Technologies Group and Jefferies Financial Group 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 Risk-Return Analysis module to view associations between returns expected from investment and the risk you assume.