Correlation Between Axcelis Technologies and Sims Metal
Can any of the company-specific risk be diversified away by investing in both Axcelis Technologies and Sims Metal 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 Sims Metal into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Axcelis Technologies and Sims Metal Management, you can compare the effects of market volatilities on Axcelis Technologies and Sims Metal 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 Sims Metal. Check out your portfolio center. Please also check ongoing floating volatility patterns of Axcelis Technologies and Sims Metal.
Diversification Opportunities for Axcelis Technologies and Sims Metal
-0.28 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Axcelis and Sims is -0.28. Overlapping area represents the amount of risk that can be diversified away by holding Axcelis Technologies and Sims Metal Management in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Sims Metal Management 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 Sims Metal. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Sims Metal Management has no effect on the direction of Axcelis Technologies i.e., Axcelis Technologies and Sims Metal go up and down completely randomly.
Pair Corralation between Axcelis Technologies and Sims Metal
Assuming the 90 days trading horizon Axcelis Technologies is expected to generate 1.28 times more return on investment than Sims Metal. However, Axcelis Technologies is 1.28 times more volatile than Sims Metal Management. It trades about 0.05 of its potential returns per unit of risk. Sims Metal Management is currently generating about 0.02 per unit of risk. If you would invest 7,016 in Axcelis Technologies on September 16, 2024 and sell it today you would earn a total of 164.00 from holding Axcelis Technologies or generate 2.34% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Axcelis Technologies vs. Sims Metal Management
Performance |
| Timeline |
| Axcelis Technologies |
| Sims Metal Management |
Axcelis Technologies and Sims Metal Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Axcelis Technologies and Sims Metal
The main advantage of trading using opposite Axcelis Technologies and Sims Metal positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Axcelis Technologies position performs unexpectedly, Sims Metal 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 Sims Metal will offset losses from the drop in Sims Metal's long position.| Axcelis Technologies vs. Apple Inc | Axcelis Technologies vs. Apple Inc | Axcelis Technologies vs. Apple Inc | Axcelis Technologies vs. Apple Inc |
| Sims Metal vs. BW OFFSHORE LTD | Sims Metal vs. Axcelis Technologies | Sims Metal vs. Uber Technologies | Sims Metal vs. THORNEY TECHS LTD |
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 Financial Widgets module to easily integrated Macroaxis content with over 30 different plug-and-play financial widgets.
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