Correlation Between SAP SE and AXWAY SOFTWARE
Can any of the company-specific risk be diversified away by investing in both SAP SE 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 SAP SE and AXWAY SOFTWARE into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between SAP SE and AXWAY SOFTWARE EO, you can compare the effects of market volatilities on SAP SE 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 SAP SE with a short position of AXWAY SOFTWARE. Check out your portfolio center. Please also check ongoing floating volatility patterns of SAP SE and AXWAY SOFTWARE.
Diversification Opportunities for SAP SE and AXWAY SOFTWARE
0.66 | Correlation Coefficient |
Poor diversification
The 3 months correlation between SAP and AXWAY is 0.66. Overlapping area represents the amount of risk that can be diversified away by holding SAP SE and AXWAY SOFTWARE EO in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on AXWAY SOFTWARE EO and SAP SE 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 SAP SE 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 EO has no effect on the direction of SAP SE i.e., SAP SE and AXWAY SOFTWARE go up and down completely randomly.
Pair Corralation between SAP SE and AXWAY SOFTWARE
Assuming the 90 days trading horizon SAP SE is expected to generate 3.31 times less return on investment than AXWAY SOFTWARE. But when comparing it to its historical volatility, SAP SE is 1.6 times less risky than AXWAY SOFTWARE. It trades about 0.1 of its potential returns per unit of risk. AXWAY SOFTWARE EO is currently generating about 0.2 of returns per unit of risk over similar time horizon. If you would invest 2,990 in AXWAY SOFTWARE EO on April 23, 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 Together |
Strength | Significant |
Accuracy | 100.0% |
Values | Daily Returns |
SAP SE vs. AXWAY SOFTWARE EO
Performance |
Timeline |
SAP SE |
AXWAY SOFTWARE EO |
SAP SE and AXWAY SOFTWARE Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with SAP SE and AXWAY SOFTWARE
The main advantage of trading using opposite SAP SE and AXWAY SOFTWARE positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if SAP SE 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.SAP SE vs. Coffee Holding Co | SAP SE vs. Jacquet Metal Service | SAP SE vs. MAG SILVER | SAP SE vs. Eurasia Mining Plc |
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Check out your portfolio center.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 Volatility module to check portfolio volatility and analyze historical return density to properly model market risk.
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