Correlation Between Axway Software and Groupe Pizzorno

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

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

Diversification Opportunities for Axway Software and Groupe Pizzorno

0.86

Correlation Coefficient

Axway Software  Groupe Pizzorno

Very poor diversification

The 3 months correlation between Axway and Groupe is 0.86. Overlapping area represents the amount of risk that can be diversified away by holding Axway Software and Groupe Pizzorno Environnement in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Groupe Pizzorno Envi 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 Groupe Pizzorno. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Groupe Pizzorno Envi has no effect on the direction of Axway Software i.e., Axway Software and Groupe Pizzorno go up and down completely randomly.

Pair Corralation between Axway Software and Groupe Pizzorno

Assuming the 90 days trading horizon Axway Software is expected to under-perform the Groupe Pizzorno. But the stock apears to be less risky and, when comparing its historical volatility, Axway Software is 1.6 times less risky than Groupe Pizzorno. The stock trades about -0.12 of its potential returns per unit of risk. The Groupe Pizzorno Environnement is currently generating about -0.04 of returns per unit of risk over similar time horizon. If you would invest  8,100  in Groupe Pizzorno Environnement on August 31, 2024 and sell it today you would lose (100.00) from holding Groupe Pizzorno Environnement or give up 1.23% of portfolio value over 90 days.

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

Axway Software  vs.  Groupe Pizzorno Environnement

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.

Groupe Pizzorno Envi

Risk-Adjusted Performance

2 of 100

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in Groupe Pizzorno Environnement are ranked lower than 2 (%) of all global equities and portfolios over the last 90 days. Despite somewhat strong technical and fundamental indicators, Groupe Pizzorno 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 Groupe Pizzorno

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

The idea behind Axway Software and Groupe Pizzorno Environnement 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 Price Exposure Probability module to analyze equity upside and downside potential for a given time horizon across multiple markets.