Correlation Between Axway Software and Blue Star

Can any of the company-specific risk be diversified away by investing in both Axway Software and Blue Star 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 Blue Star 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 Blue Star Capital, you can compare the effects of market volatilities on Axway Software and Blue Star 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 Blue Star. Check out your portfolio center. Please also check ongoing floating volatility patterns of Axway Software and Blue Star.

Diversification Opportunities for Axway Software and Blue Star

-0.07

Correlation Coefficient

Axway Software  Blue Star

Good diversification

The 3 months correlation between Axway and Blue is -0.07. Overlapping area represents the amount of risk that can be diversified away by holding Axway Software SA and Blue Star Capital in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Blue Star Capital 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 Blue Star. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Blue Star Capital has no effect on the direction of Axway Software i.e., Axway Software and Blue Star go up and down completely randomly.

Pair Corralation between Axway Software and Blue Star

Assuming the 90 days trading horizon Axway Software SA is expected to generate 0.14 times more return on investment than Blue Star. However, Axway Software SA is 7.36 times less risky than Blue Star. It trades about 0.18 of its potential returns per unit of risk. Blue Star Capital is currently generating about 0.02 per unit of risk. If you would invest  2,380  in Axway Software SA on September 30, 2024 and sell it today you would earn a total of  310.00  from holding Axway Software SA or generate 13.03% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Insignificant
Accuracy	95.31%
Values	Daily Returns

Axway Software SA  vs.  Blue Star Capital

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.

Blue Star Capital

Risk-Adjusted Performance

1 of 100

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in Blue Star Capital are ranked lower than 1 (%) of all global equities and portfolios over the last 90 days. In spite of rather uncertain technical and fundamental indicators, Blue Star may actually be approaching a critical reversion point that can send shares even higher in January 2025.

Pair Trading with Axway Software and Blue Star

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

The idea behind Axway Software SA and Blue Star Capital 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 Performance Analysis module to check effects of mean-variance optimization against your current asset allocation.