Correlation Between Public Storage and Axcelis Technologies
Can any of the company-specific risk be diversified away by investing in both Public Storage 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 Public Storage and Axcelis Technologies into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Public Storage and Axcelis Technologies, you can compare the effects of market volatilities on Public Storage 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 Public Storage with a short position of Axcelis Technologies. Check out your portfolio center. Please also check ongoing floating volatility patterns of Public Storage and Axcelis Technologies.
Diversification Opportunities for Public Storage and Axcelis Technologies
-0.11 | Correlation Coefficient |
Good diversification
The 3 months correlation between Public and Axcelis is -0.11. Overlapping area represents the amount of risk that can be diversified away by holding Public Storage and Axcelis Technologies in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Axcelis Technologies and Public Storage 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 Public Storage 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 Public Storage i.e., Public Storage and Axcelis Technologies go up and down completely randomly.
Pair Corralation between Public Storage and Axcelis Technologies
Assuming the 90 days horizon Public Storage is expected to generate 0.45 times more return on investment than Axcelis Technologies. However, Public Storage is 2.25 times less risky than Axcelis Technologies. It trades about 0.06 of its potential returns per unit of risk. Axcelis Technologies is currently generating about -0.05 per unit of risk. If you would invest 24,769 in Public Storage on September 2, 2024 and sell it today you would earn a total of 8,551 from holding Public Storage or generate 34.52% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Public Storage vs. Axcelis Technologies
Performance |
| Timeline |
| Public Storage |
| Axcelis Technologies |
Public Storage and Axcelis Technologies Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Public Storage and Axcelis Technologies
The main advantage of trading using opposite Public Storage and Axcelis Technologies positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Public Storage 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.The idea behind Public Storage and Axcelis Technologies pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.| Axcelis Technologies vs. Apple Inc | Axcelis Technologies vs. Apple Inc | Axcelis Technologies vs. Apple Inc | Axcelis Technologies vs. Apple Inc |
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 Sectors module to list of equity sectors categorizing publicly traded companies based on their primary business activities.
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