Correlation Between Axcelis Technologies and Infinera
Can any of the company-specific risk be diversified away by investing in both Axcelis Technologies and Infinera 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 Infinera into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Axcelis Technologies and Infinera, you can compare the effects of market volatilities on Axcelis Technologies and Infinera 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 Infinera. Check out your portfolio center. Please also check ongoing floating volatility patterns of Axcelis Technologies and Infinera.
Diversification Opportunities for Axcelis Technologies and Infinera
-0.39 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Axcelis and Infinera is -0.39. Overlapping area represents the amount of risk that can be diversified away by holding Axcelis Technologies and Infinera in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Infinera 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 Infinera. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Infinera has no effect on the direction of Axcelis Technologies i.e., Axcelis Technologies and Infinera go up and down completely randomly.
Pair Corralation between Axcelis Technologies and Infinera
Given the investment horizon of 90 days Axcelis Technologies is expected to under-perform the Infinera. In addition to that, Axcelis Technologies is 8.44 times more volatile than Infinera. It trades about -0.24 of its total potential returns per unit of risk. Infinera is currently generating about -0.26 per unit of volatility. If you would invest 674.00 in Infinera on August 28, 2024 and sell it today you would lose (12.00) from holding Infinera or give up 1.78% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Axcelis Technologies vs. Infinera
Performance |
| Timeline |
| Axcelis Technologies |
| Infinera |
Axcelis Technologies and Infinera Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Axcelis Technologies and Infinera
The main advantage of trading using opposite Axcelis Technologies and Infinera positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Axcelis Technologies position performs unexpectedly, Infinera 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 Infinera will offset losses from the drop in Infinera's long position.The idea behind Axcelis Technologies and Infinera 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.| Infinera vs. Ichor Holdings | Infinera vs. Fabrinet | Infinera vs. Hello Group | Infinera vs. Ultra Clean Holdings |
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 Sync Your Broker module to sync your existing holdings, watchlists, positions or portfolios from thousands of online brokerage services, banks, investment account aggregators and robo-advisors..
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