Correlation Between Axway Software and Aubay Socit

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

By analyzing existing cross correlation between Axway Software and Aubay Socit Anonyme, you can compare the effects of market volatilities on Axway Software and Aubay Socit 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 Aubay Socit. Check out your portfolio center. Please also check ongoing floating volatility patterns of Axway Software and Aubay Socit.

Diversification Opportunities for Axway Software and Aubay Socit

0.82

Correlation Coefficient

Axway Software  Aubay Socit

Very poor diversification

The 3 months correlation between Axway and Aubay is 0.82. Overlapping area represents the amount of risk that can be diversified away by holding Axway Software and Aubay Socit Anonyme in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Aubay Socit Anonyme 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 are associated (or correlated) with Aubay Socit. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Aubay Socit Anonyme has no effect on the direction of Axway Software i.e., Axway Software and Aubay Socit go up and down completely randomly.

Pair Corralation between Axway Software and Aubay Socit

Assuming the 90 days trading horizon Axway Software is expected to generate 1.11 times less return on investment than Aubay Socit. But when comparing it to its historical volatility, Axway Software is 1.38 times less risky than Aubay Socit. It trades about 0.25 of its potential returns per unit of risk. Aubay Socit Anonyme is currently generating about 0.2 of returns per unit of risk over similar time horizon. If you would invest  3,630  in Aubay Socit Anonyme on August 30, 2024 and sell it today you would earn a total of  780.00  from holding Aubay Socit Anonyme or generate 21.49% return on investment over 90 days.

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

Axway Software  vs.  Aubay Socit Anonyme

Axway Software

Risk-Adjusted Performance

19 of 100

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in Axway Software are ranked lower than 19 (%) of all global equities and portfolios over the last 90 days. Despite somewhat weak basic indicators, Axway Software sustained solid returns over the last few months and may actually be approaching a breakup point.

Aubay Socit Anonyme

Risk-Adjusted Performance

15 of 100

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Aubay Socit Anonyme are ranked lower than 15 (%) of all global equities and portfolios over the last 90 days. Despite somewhat weak fundamental drivers, Aubay Socit sustained solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Axway Software and Aubay Socit

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

The idea behind Axway Software and Aubay Socit Anonyme 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.