Correlation Between Bankers Investment and Axway Software

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

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

Diversification Opportunities for Bankers Investment and Axway Software

0.66

Correlation Coefficient

Bankers Investment  Axway Software

Poor diversification

The 3 months correlation between Bankers and Axway is 0.66. Overlapping area represents the amount of risk that can be diversified away by holding Bankers Investment Trust and Axway Software SA in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Axway Software SA and Bankers Investment 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 Bankers Investment Trust 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 SA has no effect on the direction of Bankers Investment i.e., Bankers Investment and Axway Software go up and down completely randomly.

Pair Corralation between Bankers Investment and Axway Software

Assuming the 90 days trading horizon Bankers Investment is expected to generate 3.86 times less return on investment than Axway Software. But when comparing it to its historical volatility, Bankers Investment Trust is 1.97 times less risky than Axway Software. It trades about 0.09 of its potential returns per unit of risk. Axway Software SA is currently generating about 0.18 of returns per unit of risk over similar time horizon. If you would invest  2,370  in Axway Software SA on September 23, 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	Significant
Accuracy	100.0%
Values	Daily Returns

Bankers Investment Trust  vs.  Axway Software SA

Bankers Investment Trust

Risk-Adjusted Performance

7 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Bankers Investment Trust are ranked lower than 7 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively stable basic indicators, Bankers Investment is not utilizing all of its potentials. The newest stock price uproar, may contribute to short-horizon losses for the private investors.

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 may actually be approaching a critical reversion point that can send shares even higher in January 2025.

Pair Trading with Bankers Investment and Axway Software

The main advantage of trading using opposite Bankers Investment and Axway Software positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Bankers Investment 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 Bankers Investment Trust and Axway Software SA 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 Anywhere module to track or share privately all of your investments from the convenience of any device.