Correlation Between HEALTHSTREAM (HL5SG) and Axcelis Technologies
Can any of the company-specific risk be diversified away by investing in both HEALTHSTREAM (HL5SG) 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 HEALTHSTREAM (HL5SG) and Axcelis Technologies into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between HEALTHSTREAM and Axcelis Technologies, you can compare the effects of market volatilities on HEALTHSTREAM (HL5SG) 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 HEALTHSTREAM (HL5SG) with a short position of Axcelis Technologies. Check out your portfolio center. Please also check ongoing floating volatility patterns of HEALTHSTREAM (HL5SG) and Axcelis Technologies.
Diversification Opportunities for HEALTHSTREAM (HL5SG) and Axcelis Technologies
-0.86 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between HEALTHSTREAM and Axcelis is -0.86. Overlapping area represents the amount of risk that can be diversified away by holding HEALTHSTREAM and Axcelis Technologies in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Axcelis Technologies and HEALTHSTREAM (HL5SG) 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 HEALTHSTREAM 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 HEALTHSTREAM (HL5SG) i.e., HEALTHSTREAM (HL5SG) and Axcelis Technologies go up and down completely randomly.
Pair Corralation between HEALTHSTREAM (HL5SG) and Axcelis Technologies
Assuming the 90 days trading horizon HEALTHSTREAM is expected to generate 0.65 times more return on investment than Axcelis Technologies. However, HEALTHSTREAM is 1.54 times less risky than Axcelis Technologies. It trades about 0.19 of its potential returns per unit of risk. Axcelis Technologies is currently generating about -0.17 per unit of risk. If you would invest 2,557 in HEALTHSTREAM on October 14, 2024 and sell it today you would earn a total of 563.00 from holding HEALTHSTREAM or generate 22.02% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
HEALTHSTREAM vs. Axcelis Technologies
Performance |
| Timeline |
| HEALTHSTREAM (HL5SG) |
| Axcelis Technologies |
HEALTHSTREAM (HL5SG) and Axcelis Technologies Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with HEALTHSTREAM (HL5SG) and Axcelis Technologies
The main advantage of trading using opposite HEALTHSTREAM (HL5SG) and Axcelis Technologies positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if HEALTHSTREAM (HL5SG) 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.| HEALTHSTREAM (HL5SG) vs. Apple Inc | HEALTHSTREAM (HL5SG) vs. Apple Inc | HEALTHSTREAM (HL5SG) vs. Apple Inc | HEALTHSTREAM (HL5SG) vs. Apple Inc |
| Axcelis Technologies vs. Fortescue Metals Group | Axcelis Technologies vs. HEALTHSTREAM | Axcelis Technologies vs. NIGHTINGALE HEALTH EO | Axcelis Technologies vs. Molina Healthcare |
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 Portfolio Backtesting module to avoid under-diversification and over-optimization by backtesting your portfolios.
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