Correlation Between AXWAY SOFTWARE and AstraZeneca PLC

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

By analyzing existing cross correlation between AXWAY SOFTWARE EO and AstraZeneca PLC, you can compare the effects of market volatilities on AXWAY SOFTWARE and AstraZeneca PLC 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 AstraZeneca PLC. Check out your portfolio center. Please also check ongoing floating volatility patterns of AXWAY SOFTWARE and AstraZeneca PLC.

Diversification Opportunities for AXWAY SOFTWARE and AstraZeneca PLC

-0.88

Correlation Coefficient

AXWAY SOFTWARE  AstraZeneca PLC

Pay attention - limited upside

The 3 months correlation between AXWAY and AstraZeneca is -0.88. Overlapping area represents the amount of risk that can be diversified away by holding AXWAY SOFTWARE EO and AstraZeneca PLC in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on AstraZeneca PLC 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 EO are associated (or correlated) with AstraZeneca PLC. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of AstraZeneca PLC has no effect on the direction of AXWAY SOFTWARE i.e., AXWAY SOFTWARE and AstraZeneca PLC go up and down completely randomly.

Pair Corralation between AXWAY SOFTWARE and AstraZeneca PLC

Assuming the 90 days horizon AXWAY SOFTWARE EO is expected to generate 0.67 times more return on investment than AstraZeneca PLC. However, AXWAY SOFTWARE EO is 1.5 times less risky than AstraZeneca PLC. It trades about 0.2 of its potential returns per unit of risk. AstraZeneca PLC is currently generating about -0.14 per unit of risk. If you would invest  2,290  in AXWAY SOFTWARE EO on September 4, 2024 and sell it today you would earn a total of  410.00  from holding AXWAY SOFTWARE EO or generate 17.9% return on investment over 90 days.

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

AXWAY SOFTWARE EO  vs.  AstraZeneca PLC

AXWAY SOFTWARE EO

Risk-Adjusted Performance

15 of 100

Good

Compared to the overall equity markets, risk-adjusted returns on investments in AXWAY SOFTWARE EO are ranked lower than 15 (%) of all global equities and portfolios over the last 90 days. Despite nearly fragile basic indicators, AXWAY SOFTWARE reported solid returns over the last few months and may actually be approaching a breakup point.

AstraZeneca PLC

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days AstraZeneca PLC has generated negative risk-adjusted returns adding no value to investors with long positions. Despite uncertain performance in the last few months, the Stock's basic indicators remain nearly stable which may send shares a bit higher in January 2025. The current disturbance may also be a sign of long-run up-swing for the company stockholders.

Pair Trading with AXWAY SOFTWARE and AstraZeneca PLC

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

The idea behind AXWAY SOFTWARE EO and AstraZeneca PLC 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 Portfolio File Import module to quickly import all of your third-party portfolios from your local drive in csv format.