Correlation Between Axcelis Technologies and Daqo New
Can any of the company-specific risk be diversified away by investing in both Axcelis Technologies and Daqo New 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 Daqo New into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Axcelis Technologies and Daqo New Energy, you can compare the effects of market volatilities on Axcelis Technologies and Daqo New 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 Daqo New. Check out your portfolio center. Please also check ongoing floating volatility patterns of Axcelis Technologies and Daqo New.
Diversification Opportunities for Axcelis Technologies and Daqo New
-0.51 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Axcelis and Daqo is -0.51. Overlapping area represents the amount of risk that can be diversified away by holding Axcelis Technologies and Daqo New Energy in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Daqo New Energy 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 Daqo New. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Daqo New Energy has no effect on the direction of Axcelis Technologies i.e., Axcelis Technologies and Daqo New go up and down completely randomly.
Pair Corralation between Axcelis Technologies and Daqo New
Given the investment horizon of 90 days Axcelis Technologies is expected to under-perform the Daqo New. But the stock apears to be less risky and, when comparing its historical volatility, Axcelis Technologies is 1.54 times less risky than Daqo New. The stock trades about -0.08 of its potential returns per unit of risk. The Daqo New Energy is currently generating about 0.02 of returns per unit of risk over similar time horizon. If you would invest 1,993 in Daqo New Energy on August 24, 2024 and sell it today you would lose (72.00) from holding Daqo New Energy or give up 3.61% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Axcelis Technologies vs. Daqo New Energy
Performance |
| Timeline |
| Axcelis Technologies |
| Daqo New Energy |
Axcelis Technologies and Daqo New Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Axcelis Technologies and Daqo New
The main advantage of trading using opposite Axcelis Technologies and Daqo New positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Axcelis Technologies position performs unexpectedly, Daqo New 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 Daqo New will offset losses from the drop in Daqo New's long position.| Axcelis Technologies vs. inTest | Axcelis Technologies vs. Lam Research Corp | Axcelis Technologies vs. Photronics | Axcelis Technologies vs. indie Semiconductor |
| Daqo New vs. Axcelis Technologies | Daqo New vs. Kulicke and Soffa | Daqo New vs. Ultra Clean Holdings | Daqo New vs. Cohu 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 Instant Ratings module to determine any equity ratings based on digital recommendations. Macroaxis instant equity ratings are based on combination of fundamental analysis and risk-adjusted market performance.
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