Correlation Between AXWAY SOFTWARE and Amazon

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

Diversification Opportunities for AXWAY SOFTWARE and Amazon

-0.48

Correlation Coefficient

AXWAY SOFTWARE  Amazon

Very good diversification

The 3 months correlation between AXWAY and Amazon is -0.48. Overlapping area represents the amount of risk that can be diversified away by holding AXWAY SOFTWARE EO and Amazon Inc in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Amazon Inc 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 Amazon. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Amazon Inc has no effect on the direction of AXWAY SOFTWARE i.e., AXWAY SOFTWARE and Amazon go up and down completely randomly.

Pair Corralation between AXWAY SOFTWARE and Amazon

Assuming the 90 days horizon AXWAY SOFTWARE is expected to generate 1.0 times less return on investment than Amazon. But when comparing it to its historical volatility, AXWAY SOFTWARE EO is 1.13 times less risky than Amazon. It trades about 0.39 of its potential returns per unit of risk. Amazon Inc is currently generating about 0.34 of returns per unit of risk over similar time horizon. If you would invest  15,074  in Amazon Inc on February 17, 2025 and sell it today you would earn a total of  3,298  from holding Amazon Inc or generate 21.88% return on investment over 90 days.

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

AXWAY SOFTWARE EO  vs.  Amazon Inc

AXWAY SOFTWARE EO

Risk-Adjusted Performance

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in AXWAY SOFTWARE EO are ranked lower than 18 (%) 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.

Amazon Inc

Risk-Adjusted Performance

Very Weak

Over the last 90 days Amazon Inc has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of uncertain performance in the last few months, the Stock's basic indicators remain very healthy which may send shares a bit higher in June 2025. The recent disarray may also be a sign of long period up-swing for the firm investors.

Pair Trading with AXWAY SOFTWARE and Amazon

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

The idea behind AXWAY SOFTWARE EO and Amazon Inc 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 Optimization module to compute new portfolio that will generate highest expected return given your specified tolerance for risk.