Correlation Between NYSE Composite and Axcelis Technologies
Can any of the company-specific risk be diversified away by investing in both NYSE Composite 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 NYSE Composite and Axcelis Technologies into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between NYSE Composite and Axcelis Technologies, you can compare the effects of market volatilities on NYSE Composite 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 NYSE Composite with a short position of Axcelis Technologies. Check out your portfolio center. Please also check ongoing floating volatility patterns of NYSE Composite and Axcelis Technologies.
Diversification Opportunities for NYSE Composite and Axcelis Technologies
-0.58 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between NYSE and Axcelis is -0.58. Overlapping area represents the amount of risk that can be diversified away by holding NYSE Composite and Axcelis Technologies in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Axcelis Technologies and NYSE Composite 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 NYSE Composite 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 NYSE Composite i.e., NYSE Composite and Axcelis Technologies go up and down completely randomly.
Pair Corralation between NYSE Composite and Axcelis Technologies
Assuming the 90 days trading horizon NYSE Composite is expected to generate 0.25 times more return on investment than Axcelis Technologies. However, NYSE Composite is 3.97 times less risky than Axcelis Technologies. It trades about 0.21 of its potential returns per unit of risk. Axcelis Technologies is currently generating about -0.31 per unit of risk. If you would invest 1,954,967 in NYSE Composite on August 27, 2024 and sell it today you would earn a total of 57,378 from holding NYSE Composite or generate 2.93% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
NYSE Composite vs. Axcelis Technologies
Performance |
| Timeline |
NYSE Composite and Axcelis Technologies Volatility Contrast
Predicted Return Density |
| Returns |
NYSE Composite
Pair trading matchups for NYSE Composite
Axcelis Technologies
Pair trading matchups for Axcelis Technologies
Pair Trading with NYSE Composite and Axcelis Technologies
The main advantage of trading using opposite NYSE Composite and Axcelis Technologies positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if NYSE Composite 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.| NYSE Composite vs. Hooker Furniture | NYSE Composite vs. Hudson Pacific Properties | NYSE Composite vs. Canlan Ice Sports | NYSE Composite vs. Boston Properties |
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 Correlation Analysis module to reduce portfolio risk simply by holding instruments which are not perfectly correlated.
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