Correlation Between Cars and Axcelis Technologies
Can any of the company-specific risk be diversified away by investing in both Cars 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 Cars and Axcelis Technologies into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Cars Inc and Axcelis Technologies, you can compare the effects of market volatilities on Cars 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 Cars with a short position of Axcelis Technologies. Check out your portfolio center. Please also check ongoing floating volatility patterns of Cars and Axcelis Technologies.
Diversification Opportunities for Cars and Axcelis Technologies
-0.66 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Cars and Axcelis is -0.66. Overlapping area represents the amount of risk that can be diversified away by holding Cars Inc and Axcelis Technologies in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Axcelis Technologies and Cars 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 Cars Inc 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 Cars i.e., Cars and Axcelis Technologies go up and down completely randomly.
Pair Corralation between Cars and Axcelis Technologies
Assuming the 90 days horizon Cars Inc is expected to generate 0.97 times more return on investment than Axcelis Technologies. However, Cars Inc is 1.03 times less risky than Axcelis Technologies. It trades about 0.23 of its potential returns per unit of risk. Axcelis Technologies is currently generating about -0.19 per unit of risk. If you would invest 1,440 in Cars Inc on September 3, 2024 and sell it today you would earn a total of 410.00 from holding Cars Inc or generate 28.47% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Cars Inc vs. Axcelis Technologies
Performance |
| Timeline |
| Cars Inc |
| Axcelis Technologies |
Cars and Axcelis Technologies Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Cars and Axcelis Technologies
The main advantage of trading using opposite Cars and Axcelis Technologies positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Cars 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.| Cars vs. Tower One Wireless | Cars vs. Corporate Office Properties | Cars vs. Check Point Software | Cars vs. MACOM Technology Solutions |
| Axcelis Technologies vs. Tower One Wireless | Axcelis Technologies vs. FORWARD AIR P | Axcelis Technologies vs. Corsair Gaming | Axcelis Technologies vs. MTI WIRELESS EDGE |
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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