Correlation Between Axway Software and Claranova

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

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

Diversification Opportunities for Axway Software and Claranova

-0.34

Correlation Coefficient

Axway Software  Claranova

Very good diversification

The 3 months correlation between Axway and Claranova is -0.34. Overlapping area represents the amount of risk that can be diversified away by holding Axway Software and Claranova SE in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Claranova SE 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 Claranova. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Claranova SE has no effect on the direction of Axway Software i.e., Axway Software and Claranova go up and down completely randomly.

Pair Corralation between Axway Software and Claranova

Assuming the 90 days trading horizon Axway Software is expected to generate 0.39 times more return on investment than Claranova. However, Axway Software is 2.56 times less risky than Claranova. It trades about 0.24 of its potential returns per unit of risk. Claranova SE is currently generating about 0.0 per unit of risk. If you would invest  2,300  in Axway Software on August 31, 2024 and sell it today you would earn a total of  440.00  from holding Axway Software or generate 19.13% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Insignificant
Accuracy	98.46%
Values	Daily Returns

Axway Software  vs.  Claranova SE

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.

Claranova SE

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Claranova SE has generated negative risk-adjusted returns adding no value to investors with long positions. Despite somewhat strong basic indicators, Claranova is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

Pair Trading with Axway Software and Claranova

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

The idea behind Axway Software and Claranova SE 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 Portfolio Analyzer module to portfolio analysis module that provides access to portfolio diagnostics and optimization engine.