Correlation Between RCM TECHNOLOGIES and Axcelis Technologies
Can any of the company-specific risk be diversified away by investing in both RCM TECHNOLOGIES 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 RCM TECHNOLOGIES and Axcelis Technologies into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between RCM TECHNOLOGIES and Axcelis Technologies, you can compare the effects of market volatilities on RCM TECHNOLOGIES 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 RCM TECHNOLOGIES with a short position of Axcelis Technologies. Check out your portfolio center. Please also check ongoing floating volatility patterns of RCM TECHNOLOGIES and Axcelis Technologies.
Diversification Opportunities for RCM TECHNOLOGIES and Axcelis Technologies
-0.73 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between RCM and Axcelis is -0.73. Overlapping area represents the amount of risk that can be diversified away by holding RCM TECHNOLOGIES and Axcelis Technologies in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Axcelis Technologies and RCM TECHNOLOGIES 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 RCM TECHNOLOGIES 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 RCM TECHNOLOGIES i.e., RCM TECHNOLOGIES and Axcelis Technologies go up and down completely randomly.
Pair Corralation between RCM TECHNOLOGIES and Axcelis Technologies
Assuming the 90 days trading horizon RCM TECHNOLOGIES is expected to generate 1.06 times more return on investment than Axcelis Technologies. However, RCM TECHNOLOGIES is 1.06 times more volatile than Axcelis Technologies. It trades about -0.02 of its potential returns per unit of risk. Axcelis Technologies is currently generating about -0.05 per unit of risk. If you would invest 2,480 in RCM TECHNOLOGIES on August 27, 2024 and sell it today you would lose (480.00) from holding RCM TECHNOLOGIES or give up 19.35% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
RCM TECHNOLOGIES vs. Axcelis Technologies
Performance |
| Timeline |
| RCM TECHNOLOGIES |
| Axcelis Technologies |
RCM TECHNOLOGIES and Axcelis Technologies Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with RCM TECHNOLOGIES and Axcelis Technologies
The main advantage of trading using opposite RCM TECHNOLOGIES and Axcelis Technologies positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if RCM TECHNOLOGIES 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.| RCM TECHNOLOGIES vs. Apple Inc | RCM TECHNOLOGIES vs. Apple Inc | RCM TECHNOLOGIES vs. Apple Inc | RCM TECHNOLOGIES vs. Microsoft |
| 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 Correlation Analysis module to reduce portfolio risk simply by holding instruments which are not perfectly correlated.
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