Correlation Between Axcelis Technologies and Cohu
Can any of the company-specific risk be diversified away by investing in both Axcelis Technologies and Cohu 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 Cohu into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Axcelis Technologies and Cohu Inc, you can compare the effects of market volatilities on Axcelis Technologies and Cohu 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 Cohu. Check out your portfolio center. Please also check ongoing floating volatility patterns of Axcelis Technologies and Cohu.
Diversification Opportunities for Axcelis Technologies and Cohu
-0.22 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Axcelis and Cohu is -0.22. Overlapping area represents the amount of risk that can be diversified away by holding Axcelis Technologies and Cohu Inc in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Cohu 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 Cohu. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Cohu Inc has no effect on the direction of Axcelis Technologies i.e., Axcelis Technologies and Cohu go up and down completely randomly.
Pair Corralation between Axcelis Technologies and Cohu
Given the investment horizon of 90 days Axcelis Technologies is expected to under-perform the Cohu. But the stock apears to be less risky and, when comparing its historical volatility, Axcelis Technologies is 1.19 times less risky than Cohu. The stock trades about -0.31 of its potential returns per unit of risk. The Cohu Inc is currently generating about 0.02 of returns per unit of risk over similar time horizon. If you would invest 2,647 in Cohu Inc on August 27, 2024 and sell it today you would earn a total of 18.00 from holding Cohu Inc or generate 0.68% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Axcelis Technologies vs. Cohu Inc
Performance |
| Timeline |
| Axcelis Technologies |
| Cohu Inc |
Axcelis Technologies and Cohu Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Axcelis Technologies and Cohu
The main advantage of trading using opposite Axcelis Technologies and Cohu positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Axcelis Technologies position performs unexpectedly, Cohu 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 Cohu will offset losses from the drop in Cohu's long position.The idea behind Axcelis Technologies and Cohu Inc 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.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 Bond Analysis module to evaluate and analyze corporate bonds as a potential investment for your portfolios..
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