Correlation Between AXWAY SOFTWARE and Chesapeake Utilities

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

Diversification Opportunities for AXWAY SOFTWARE and Chesapeake Utilities

-0.87

Correlation Coefficient

AXWAY SOFTWARE  Chesapeake Utilities

Pay attention - limited upside

The 3 months correlation between AXWAY and Chesapeake is -0.87. Overlapping area represents the amount of risk that can be diversified away by holding AXWAY SOFTWARE EO and Chesapeake Utilities in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Chesapeake Utilities 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 Chesapeake Utilities. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Chesapeake Utilities has no effect on the direction of AXWAY SOFTWARE i.e., AXWAY SOFTWARE and Chesapeake Utilities go up and down completely randomly.

Pair Corralation between AXWAY SOFTWARE and Chesapeake Utilities

Assuming the 90 days horizon AXWAY SOFTWARE EO is expected to generate 1.76 times more return on investment than Chesapeake Utilities. However, AXWAY SOFTWARE is 1.76 times more volatile than Chesapeake Utilities. It trades about 0.2 of its potential returns per unit of risk. Chesapeake Utilities is currently generating about -0.09 per unit of risk. If you would invest  2,990  in AXWAY SOFTWARE EO on April 24, 2025 and sell it today you would earn a total of  1,150  from holding AXWAY SOFTWARE EO or generate 38.46% return on investment over 90 days.

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

AXWAY SOFTWARE EO  vs.  Chesapeake Utilities

AXWAY SOFTWARE EO

Risk-Adjusted Performance

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 uncertain basic indicators, AXWAY SOFTWARE reported solid returns over the last few months and may actually be approaching a breakup point.

Chesapeake Utilities

Risk-Adjusted Performance

Very Weak

Over the last 90 days Chesapeake Utilities has generated negative risk-adjusted returns adding no value to investors with long positions. Despite latest fragile performance, the Stock's basic indicators remain stable and the current disturbance on Wall Street may also be a sign of long-run gains for the company stockholders.

Pair Trading with AXWAY SOFTWARE and Chesapeake Utilities

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

The idea behind AXWAY SOFTWARE EO and Chesapeake Utilities 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 Equity Analysis module to research over 250,000 global equities including funds, stocks and ETFs to find investment opportunities.