Correlation Between Aluminumof China and Axcelis Technologies
Can any of the company-specific risk be diversified away by investing in both Aluminumof China 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 Aluminumof China and Axcelis Technologies into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Aluminum of and Axcelis Technologies, you can compare the effects of market volatilities on Aluminumof China 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 Aluminumof China with a short position of Axcelis Technologies. Check out your portfolio center. Please also check ongoing floating volatility patterns of Aluminumof China and Axcelis Technologies.
Diversification Opportunities for Aluminumof China and Axcelis Technologies
0.61 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Aluminumof and Axcelis is 0.61. Overlapping area represents the amount of risk that can be diversified away by holding Aluminum of and Axcelis Technologies in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Axcelis Technologies and Aluminumof China 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 Aluminum of 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 Aluminumof China i.e., Aluminumof China and Axcelis Technologies go up and down completely randomly.
Pair Corralation between Aluminumof China and Axcelis Technologies
Assuming the 90 days horizon Aluminum of is expected to generate 1.17 times more return on investment than Axcelis Technologies. However, Aluminumof China is 1.17 times more volatile than Axcelis Technologies. It trades about 0.05 of its potential returns per unit of risk. Axcelis Technologies is currently generating about -0.05 per unit of risk. If you would invest 44.00 in Aluminum of on October 14, 2024 and sell it today you would earn a total of 12.00 from holding Aluminum of or generate 27.27% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Aluminum of vs. Axcelis Technologies
Performance |
| Timeline |
| Aluminumof China |
| Axcelis Technologies |
Aluminumof China and Axcelis Technologies Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Aluminumof China and Axcelis Technologies
The main advantage of trading using opposite Aluminumof China and Axcelis Technologies positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Aluminumof China 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.| Aluminumof China vs. Insurance Australia Group | Aluminumof China vs. United Insurance Holdings | Aluminumof China vs. Direct Line Insurance | Aluminumof China vs. SAN MIGUEL BREWERY |
| Axcelis Technologies vs. Seven West Media | Axcelis Technologies vs. Tencent Music Entertainment | Axcelis Technologies vs. Ubisoft Entertainment SA | Axcelis Technologies vs. PROSIEBENSAT1 MEDIADR4 |
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 Insider Screener module to find insiders across different sectors to evaluate their impact on performance.
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