Correlation Between Axis Technologies and Homasote

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

By analyzing existing cross correlation between Axis Technologies Group and Homasote Co, you can compare the effects of market volatilities on Axis Technologies and Homasote 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 Axis Technologies with a short position of Homasote. Check out your portfolio center. Please also check ongoing floating volatility patterns of Axis Technologies and Homasote.

Diversification Opportunities for Axis Technologies and Homasote

-0.35

Correlation Coefficient

Axis Technologies  Homasote

Very good diversification

The 3 months correlation between Axis and Homasote is -0.35. Overlapping area represents the amount of risk that can be diversified away by holding Axis Technologies Group and Homasote Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Homasote and Axis Technologies 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 Axis Technologies Group are associated (or correlated) with Homasote. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Homasote has no effect on the direction of Axis Technologies i.e., Axis Technologies and Homasote go up and down completely randomly.

Pair Corralation between Axis Technologies and Homasote

Given the investment horizon of 90 days Axis Technologies Group is expected to generate 14.76 times more return on investment than Homasote. However, Axis Technologies is 14.76 times more volatile than Homasote Co. It trades about 0.19 of its potential returns per unit of risk. Homasote Co is currently generating about 0.08 per unit of risk. If you would invest  0.05  in Axis Technologies Group on September 26, 2024 and sell it today you would lose (0.01) from holding Axis Technologies Group or give up 20.0% of portfolio value over 90 days.

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

Axis Technologies Group  vs.  Homasote Co

Axis Technologies

Risk-Adjusted Performance

14 of 100

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Axis Technologies Group are ranked lower than 14 (%) of all global equities and portfolios over the last 90 days. Despite nearly fragile basic indicators, Axis Technologies reported solid returns over the last few months and may actually be approaching a breakup point.

Homasote

Risk-Adjusted Performance

6 of 100

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in Homasote Co are ranked lower than 6 (%) of all global equities and portfolios over the last 90 days. In spite of rather unsteady basic indicators, Homasote exhibited solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Axis Technologies and Homasote

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

The idea behind Axis Technologies Group and Homasote Co 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 Theme Ratings module to determine theme ratings based on digital equity recommendations. Macroaxis theme ratings are based on combination of fundamental analysis and risk-adjusted market performance.