Correlation Between American Eagle and Axcelis Technologies
Can any of the company-specific risk be diversified away by investing in both American Eagle and Axcelis Technologies 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 American Eagle and Axcelis Technologies into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between American Eagle Outfitters and Axcelis Technologies, you can compare the effects of market volatilities on American Eagle and Axcelis Technologies 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 American Eagle with a short position of Axcelis Technologies. Check out your portfolio center. Please also check ongoing floating volatility patterns of American Eagle and Axcelis Technologies.
Diversification Opportunities for American Eagle and Axcelis Technologies
0.66 | Correlation Coefficient |
Poor diversification
The 3 months correlation between American and Axcelis is 0.66. Overlapping area represents the amount of risk that can be diversified away by holding American Eagle Outfitters and Axcelis Technologies in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Axcelis Technologies and American Eagle 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 American Eagle Outfitters are associated (or correlated) with Axcelis Technologies. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Axcelis Technologies has no effect on the direction of American Eagle i.e., American Eagle and Axcelis Technologies go up and down completely randomly.
Pair Corralation between American Eagle and Axcelis Technologies
Assuming the 90 days trading horizon American Eagle Outfitters is expected to generate 0.91 times more return on investment than Axcelis Technologies. However, American Eagle Outfitters is 1.1 times less risky than Axcelis Technologies. It trades about 0.0 of its potential returns per unit of risk. Axcelis Technologies is currently generating about -0.04 per unit of risk. If you would invest 1,757 in American Eagle Outfitters on September 14, 2024 and sell it today you would lose (127.00) from holding American Eagle Outfitters or give up 7.23% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
American Eagle Outfitters vs. Axcelis Technologies
Performance |
| Timeline |
| American Eagle Outfitters |
| Axcelis Technologies |
American Eagle and Axcelis Technologies Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with American Eagle and Axcelis Technologies
The main advantage of trading using opposite American Eagle and Axcelis Technologies positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if American Eagle position performs unexpectedly, Axcelis Technologies 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 Axcelis Technologies will offset losses from the drop in Axcelis Technologies' long position.| American Eagle vs. Apple Inc | American Eagle vs. Apple Inc | American Eagle vs. Apple Inc | American Eagle vs. Apple Inc |
| Axcelis Technologies vs. UET United Electronic | Axcelis Technologies vs. Amkor Technology | Axcelis Technologies vs. DXC Technology Co | Axcelis Technologies vs. X FAB Silicon Foundries |
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 FinTech Suite module to use AI to screen and filter profitable investment opportunities.
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