Correlation Between Axway Software and ONEOK

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

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

Diversification Opportunities for Axway Software and ONEOK

0.8

Correlation Coefficient

Axway Software  ONEOK

Very poor diversification

The 3 months correlation between Axway and ONEOK is 0.8. Overlapping area represents the amount of risk that can be diversified away by holding Axway Software SA and ONEOK Inc in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on ONEOK Inc 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 SA are associated (or correlated) with ONEOK. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of ONEOK Inc has no effect on the direction of Axway Software i.e., Axway Software and ONEOK go up and down completely randomly.

Pair Corralation between Axway Software and ONEOK

Assuming the 90 days trading horizon Axway Software SA is expected to generate 0.56 times more return on investment than ONEOK. However, Axway Software SA is 1.78 times less risky than ONEOK. It trades about 0.18 of its potential returns per unit of risk. ONEOK Inc is currently generating about 0.06 per unit of risk. If you would invest  2,370  in Axway Software SA on September 22, 2024 and sell it today you would earn a total of  320.00  from holding Axway Software SA or generate 13.5% return on investment over 90 days.

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

Axway Software SA  vs.  ONEOK Inc

Axway Software SA

Risk-Adjusted Performance

14 of 100

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Axway Software SA are ranked lower than 14 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively uncertain basic indicators, Axway Software unveiled solid returns over the last few months and may actually be approaching a breakup point.

ONEOK Inc

Risk-Adjusted Performance

4 of 100

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in ONEOK Inc are ranked lower than 4 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively uncertain basic indicators, ONEOK may actually be approaching a critical reversion point that can send shares even higher in January 2025.

Pair Trading with Axway Software and ONEOK

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

The idea behind Axway Software SA and ONEOK Inc 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 Bollinger Bands module to use Bollinger Bands indicator to analyze target price for a given investing horizon.