Correlation Between Axcelis Technologies and Diamondrock Hospitality
Can any of the company-specific risk be diversified away by investing in both Axcelis Technologies and Diamondrock Hospitality 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 Axcelis Technologies and Diamondrock Hospitality into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Axcelis Technologies and Diamondrock Hospitality Co, you can compare the effects of market volatilities on Axcelis Technologies and Diamondrock Hospitality 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 Axcelis Technologies with a short position of Diamondrock Hospitality. Check out your portfolio center. Please also check ongoing floating volatility patterns of Axcelis Technologies and Diamondrock Hospitality.
Diversification Opportunities for Axcelis Technologies and Diamondrock Hospitality
-0.64 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Axcelis and Diamondrock is -0.64. Overlapping area represents the amount of risk that can be diversified away by holding Axcelis Technologies and Diamondrock Hospitality Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Diamondrock Hospitality and Axcelis 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 Axcelis Technologies are associated (or correlated) with Diamondrock Hospitality. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Diamondrock Hospitality has no effect on the direction of Axcelis Technologies i.e., Axcelis Technologies and Diamondrock Hospitality go up and down completely randomly.
Pair Corralation between Axcelis Technologies and Diamondrock Hospitality
Assuming the 90 days trading horizon Axcelis Technologies is expected to under-perform the Diamondrock Hospitality. In addition to that, Axcelis Technologies is 1.39 times more volatile than Diamondrock Hospitality Co. It trades about -0.12 of its total potential returns per unit of risk. Diamondrock Hospitality Co is currently generating about 0.17 per unit of volatility. If you would invest 757.00 in Diamondrock Hospitality Co on September 12, 2024 and sell it today you would earn a total of 163.00 from holding Diamondrock Hospitality Co or generate 21.53% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 98.46% |
| Values | Daily Returns |
Axcelis Technologies vs. Diamondrock Hospitality Co
Performance |
| Timeline |
| Axcelis Technologies |
| Diamondrock Hospitality |
Axcelis Technologies and Diamondrock Hospitality Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Axcelis Technologies and Diamondrock Hospitality
The main advantage of trading using opposite Axcelis Technologies and Diamondrock Hospitality positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Axcelis Technologies position performs unexpectedly, Diamondrock Hospitality 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 Diamondrock Hospitality will offset losses from the drop in Diamondrock Hospitality's long position.| Axcelis Technologies vs. Apple Inc | Axcelis Technologies vs. Apple Inc | Axcelis Technologies vs. Apple Inc | Axcelis Technologies vs. Apple Inc |
| Diamondrock Hospitality vs. Brockhaus Capital Management | Diamondrock Hospitality vs. LANDSEA GREEN MANAGEMENT | Diamondrock Hospitality vs. Khiron Life Sciences | Diamondrock Hospitality vs. BLUESCOPE STEEL |
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 Manager module to state of the art Portfolio Manager to monitor and improve performance of your invested capital.
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