Correlation Between Axcelis Technologies and Nova
Can any of the company-specific risk be diversified away by investing in both Axcelis Technologies and Nova 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 Nova into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Axcelis Technologies and Nova, you can compare the effects of market volatilities on Axcelis Technologies and Nova 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 Nova. Check out your portfolio center. Please also check ongoing floating volatility patterns of Axcelis Technologies and Nova.
Diversification Opportunities for Axcelis Technologies and Nova
-0.39 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Axcelis and Nova is -0.39. Overlapping area represents the amount of risk that can be diversified away by holding Axcelis Technologies and Nova in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Nova 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 Nova. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Nova has no effect on the direction of Axcelis Technologies i.e., Axcelis Technologies and Nova go up and down completely randomly.
Pair Corralation between Axcelis Technologies and Nova
Given the investment horizon of 90 days Axcelis Technologies is expected to generate 45.78 times less return on investment than Nova. But when comparing it to its historical volatility, Axcelis Technologies is 1.92 times less risky than Nova. It trades about 0.01 of its potential returns per unit of risk. Nova is currently generating about 0.29 of returns per unit of risk over similar time horizon. If you would invest 19,695 in Nova on November 1, 2024 and sell it today you would earn a total of 4,352 from holding Nova or generate 22.1% 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. Nova
Performance |
| Timeline |
| Axcelis Technologies |
| Nova |
Axcelis Technologies and Nova Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Axcelis Technologies and Nova
The main advantage of trading using opposite Axcelis Technologies and Nova positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Axcelis Technologies position performs unexpectedly, Nova 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 Nova will offset losses from the drop in Nova's long position.| Axcelis Technologies vs. Diodes Incorporated | Axcelis Technologies vs. Daqo New Energy | Axcelis Technologies vs. Micron Technology | Axcelis Technologies vs. MagnaChip Semiconductor |
| Nova vs. Diodes Incorporated | Nova vs. Daqo New Energy | Nova vs. Micron Technology | Nova vs. MagnaChip Semiconductor |
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 Positions Ratings module to determine portfolio positions ratings based on digital equity recommendations. Macroaxis instant position ratings are based on combination of fundamental analysis and risk-adjusted market performance.
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