Correlation Between Esker SA and Axway Software

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

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

Diversification Opportunities for Esker SA and Axway Software

0.56

Correlation Coefficient

Esker SA  Axway Software

Very weak diversification

The 3 months correlation between Esker and Axway is 0.56. Overlapping area represents the amount of risk that can be diversified away by holding Esker SA and Axway Software in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Axway Software and Esker SA 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 Esker SA 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 has no effect on the direction of Esker SA i.e., Esker SA and Axway Software go up and down completely randomly.

Pair Corralation between Esker SA and Axway Software

Assuming the 90 days trading horizon Esker SA is expected to generate 1.52 times less return on investment than Axway Software. In addition to that, Esker SA is 1.5 times more volatile than Axway Software. It trades about 0.1 of its total potential returns per unit of risk. Axway Software is currently generating about 0.22 per unit of volatility. If you would invest  2,320  in Axway Software on September 3, 2024 and sell it today you would earn a total of  400.00  from holding Axway Software or generate 17.24% return on investment over 90 days.

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

Esker SA  vs.  Axway Software

Esker SA

Risk-Adjusted Performance

7 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Esker SA are ranked lower than 7 (%) of all global equities and portfolios over the last 90 days. Even with relatively weak basic indicators, Esker SA may actually be approaching a critical reversion point that can send shares even higher in January 2025.

Axway Software

Risk-Adjusted Performance

17 of 100

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in Axway Software are ranked lower than 17 (%) 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.

Pair Trading with Esker SA and Axway Software

The main advantage of trading using opposite Esker SA and Axway Software positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Esker SA 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 Esker SA and Axway Software 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 Sign In To Macroaxis module to sign in to explore Macroaxis' wealth optimization platform and fintech modules.