Correlation Between Axway Software and Rentokil Initial
Can any of the company-specific risk be diversified away by investing in both Axway Software and Rentokil Initial 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 Rentokil Initial into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Axway Software SA and Rentokil Initial PLC, you can compare the effects of market volatilities on Axway Software and Rentokil Initial 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 Rentokil Initial. Check out your portfolio center. Please also check ongoing floating volatility patterns of Axway Software and Rentokil Initial.
Diversification Opportunities for Axway Software and Rentokil Initial
-0.71 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between Axway and Rentokil is -0.71. Overlapping area represents the amount of risk that can be diversified away by holding Axway Software SA and Rentokil Initial PLC in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Rentokil Initial PLC 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 SA are associated (or correlated) with Rentokil Initial. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Rentokil Initial PLC has no effect on the direction of Axway Software i.e., Axway Software and Rentokil Initial go up and down completely randomly.
Pair Corralation between Axway Software and Rentokil Initial
Assuming the 90 days trading horizon Axway Software SA is expected to under-perform the Rentokil Initial. But the stock apears to be less risky and, when comparing its historical volatility, Axway Software SA is 1.64 times less risky than Rentokil Initial. The stock trades about -0.15 of its potential returns per unit of risk. The Rentokil Initial PLC is currently generating about 0.07 of returns per unit of risk over similar time horizon. If you would invest 2,450 in Rentokil Initial PLC on August 20, 2025 and sell it today you would earn a total of 182.00 from holding Rentokil Initial PLC or generate 7.43% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Axway Software SA vs. Rentokil Initial PLC
Performance |
| Timeline |
| Axway Software SA |
| Rentokil Initial PLC |
Axway Software and Rentokil Initial Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Axway Software and Rentokil Initial
The main advantage of trading using opposite Axway Software and Rentokil Initial positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Axway Software position performs unexpectedly, Rentokil Initial 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 Rentokil Initial will offset losses from the drop in Rentokil Initial's long position.| Axway Software vs. EJF Investments | Axway Software vs. Schroders Investment Trusts | Axway Software vs. InterContinental Hotels Group | Axway Software vs. Vietnam Enterprise Investments |
| Rentokil Initial vs. UL Solutions | Rentokil Initial vs. BIP Bermuda Holdings | Rentokil Initial vs. Allegion PLC | Rentokil Initial vs. Watsco Inc |
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 File Import module to quickly import all of your third-party portfolios from your local drive in csv format.
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