Correlation Between Clean Power and Axway Software

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

By analyzing existing cross correlation between Clean Power Hydrogen and Axway Software SA, you can compare the effects of market volatilities on Clean Power and Axway Software 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 Clean Power with a short position of Axway Software. Check out your portfolio center. Please also check ongoing floating volatility patterns of Clean Power and Axway Software.

Diversification Opportunities for Clean Power and Axway Software

-0.19

Correlation Coefficient

Clean Power  Axway Software

Good diversification

The 3 months correlation between Clean and Axway is -0.19. Overlapping area represents the amount of risk that can be diversified away by holding Clean Power Hydrogen and Axway Software SA in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Axway Software SA and Clean Power 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 Clean Power Hydrogen are associated (or correlated) with Axway Software. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Axway Software SA has no effect on the direction of Clean Power i.e., Clean Power and Axway Software go up and down completely randomly.

Pair Corralation between Clean Power and Axway Software

Assuming the 90 days trading horizon Clean Power Hydrogen is expected to under-perform the Axway Software. In addition to that, Clean Power is 3.81 times more volatile than Axway Software SA. It trades about -0.05 of its total potential returns per unit of risk. Axway Software SA is currently generating about 0.15 per unit of volatility. If you would invest  2,430  in Axway Software SA on October 11, 2024 and sell it today you would earn a total of  250.00  from holding Axway Software SA or generate 10.29% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Insignificant
Accuracy	95.08%
Values	Daily Returns

Clean Power Hydrogen  vs.  Axway Software SA

Clean Power Hydrogen

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Clean Power Hydrogen has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of unsteady performance in the last few months, the Stock's basic indicators remain comparatively stable which may send shares a bit higher in February 2025. The newest uproar may also be a sign of mid-term up-swing for the firm private investors.

Axway Software SA

Risk-Adjusted Performance

11 of 100

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Axway Software SA are ranked lower than 11 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively uncertain basic indicators, Axway Software may actually be approaching a critical reversion point that can send shares even higher in February 2025.

Pair Trading with Clean Power and Axway Software

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

The idea behind Clean Power Hydrogen and Axway Software SA 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 Odds Of Bankruptcy module to get analysis of equity chance of financial distress in the next 2 years.