Correlation Between Axcelis Technologies and ADTRAN
Can any of the company-specific risk be diversified away by investing in both Axcelis Technologies and ADTRAN 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 Axcelis Technologies and ADTRAN into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Axcelis Technologies and ADTRAN Inc, you can compare the effects of market volatilities on Axcelis Technologies and ADTRAN 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 Axcelis Technologies with a short position of ADTRAN. Check out your portfolio center. Please also check ongoing floating volatility patterns of Axcelis Technologies and ADTRAN.
Diversification Opportunities for Axcelis Technologies and ADTRAN
-0.81 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between Axcelis and ADTRAN is -0.81. Overlapping area represents the amount of risk that can be diversified away by holding Axcelis Technologies and ADTRAN Inc in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on ADTRAN Inc and Axcelis Technologies 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 Axcelis Technologies are associated (or correlated) with ADTRAN. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of ADTRAN Inc has no effect on the direction of Axcelis Technologies i.e., Axcelis Technologies and ADTRAN go up and down completely randomly.
Pair Corralation between Axcelis Technologies and ADTRAN
Given the investment horizon of 90 days Axcelis Technologies is expected to under-perform the ADTRAN. But the stock apears to be less risky and, when comparing its historical volatility, Axcelis Technologies is 1.14 times less risky than ADTRAN. The stock trades about -0.05 of its potential returns per unit of risk. The ADTRAN Inc is currently generating about 0.07 of returns per unit of risk over similar time horizon. If you would invest 535.00 in ADTRAN Inc on August 24, 2024 and sell it today you would earn a total of 281.00 from holding ADTRAN Inc or generate 52.52% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Axcelis Technologies vs. ADTRAN Inc
Performance |
| Timeline |
| Axcelis Technologies |
| ADTRAN Inc |
Axcelis Technologies and ADTRAN Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Axcelis Technologies and ADTRAN
The main advantage of trading using opposite Axcelis Technologies and ADTRAN positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Axcelis Technologies position performs unexpectedly, ADTRAN 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 ADTRAN will offset losses from the drop in ADTRAN's long position.| Axcelis Technologies vs. Ultra Clean Holdings | Axcelis Technologies vs. Cohu Inc | Axcelis Technologies vs. Ichor Holdings | Axcelis Technologies vs. Entegris |
| ADTRAN vs. Mynaric AG ADR | ADTRAN vs. KVH Industries | ADTRAN vs. Telesat Corp | ADTRAN vs. Digi International |
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 Efficient Frontier module to plot and analyze your portfolio and positions against risk-return landscape of the market..
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