Correlation Between Aban Offshore and AXISCADES Technologies

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

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

Diversification Opportunities for Aban Offshore and AXISCADES Technologies

0.93

Correlation Coefficient

Aban Offshore  AXISCADES Technologies

Almost no diversification

The 3 months correlation between Aban and AXISCADES is 0.93. Overlapping area represents the amount of risk that can be diversified away by holding Aban Offshore Limited and AXISCADES Technologies Limited in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on AXISCADES Technologies and Aban Offshore 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 Aban Offshore Limited are associated (or correlated) with AXISCADES Technologies. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of AXISCADES Technologies has no effect on the direction of Aban Offshore i.e., Aban Offshore and AXISCADES Technologies go up and down completely randomly.

Pair Corralation between Aban Offshore and AXISCADES Technologies

Assuming the 90 days trading horizon Aban Offshore is expected to generate 1.93 times less return on investment than AXISCADES Technologies. But when comparing it to its historical volatility, Aban Offshore Limited is 1.16 times less risky than AXISCADES Technologies. It trades about 0.14 of its potential returns per unit of risk. AXISCADES Technologies Limited is currently generating about 0.23 of returns per unit of risk over similar time horizon. If you would invest  86,885  in AXISCADES Technologies Limited on April 21, 2025 and sell it today you would earn a total of  47,655  from holding AXISCADES Technologies Limited or generate 54.85% return on investment over 90 days.

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

Aban Offshore Limited  vs.  AXISCADES Technologies Limited

Aban Offshore Limited

Risk-Adjusted Performance

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Aban Offshore Limited are ranked lower than 10 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively conflicting basic indicators, Aban Offshore unveiled solid returns over the last few months and may actually be approaching a breakup point.

AXISCADES Technologies

Risk-Adjusted Performance

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in AXISCADES Technologies Limited are ranked lower than 17 (%) of all global equities and portfolios over the last 90 days. In spite of rather weak fundamental indicators, AXISCADES Technologies exhibited solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Aban Offshore and AXISCADES Technologies

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

The idea behind Aban Offshore Limited and AXISCADES Technologies Limited 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 Correlation Analysis module to reduce portfolio risk simply by holding instruments which are not perfectly correlated.