Correlation Between Axcelis Technologies and Japan Tobacco
Can any of the company-specific risk be diversified away by investing in both Axcelis Technologies and Japan Tobacco 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 Japan Tobacco into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Axcelis Technologies and Japan Tobacco, you can compare the effects of market volatilities on Axcelis Technologies and Japan Tobacco 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 Japan Tobacco. Check out your portfolio center. Please also check ongoing floating volatility patterns of Axcelis Technologies and Japan Tobacco.
Diversification Opportunities for Axcelis Technologies and Japan Tobacco
0.1 | Correlation Coefficient |
Average diversification
The 3 months correlation between Axcelis and Japan is 0.1. Overlapping area represents the amount of risk that can be diversified away by holding Axcelis Technologies and Japan Tobacco in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Japan Tobacco 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 Japan Tobacco. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Japan Tobacco has no effect on the direction of Axcelis Technologies i.e., Axcelis Technologies and Japan Tobacco go up and down completely randomly.
Pair Corralation between Axcelis Technologies and Japan Tobacco
Assuming the 90 days trading horizon Axcelis Technologies is expected to under-perform the Japan Tobacco. In addition to that, Axcelis Technologies is 1.98 times more volatile than Japan Tobacco. It trades about -0.12 of its total potential returns per unit of risk. Japan Tobacco is currently generating about 0.02 per unit of volatility. If you would invest 2,631 in Japan Tobacco on September 12, 2024 and sell it today you would earn a total of 19.00 from holding Japan Tobacco or generate 0.72% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Axcelis Technologies vs. Japan Tobacco
Performance |
| Timeline |
| Axcelis Technologies |
| Japan Tobacco |
Axcelis Technologies and Japan Tobacco Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Axcelis Technologies and Japan Tobacco
The main advantage of trading using opposite Axcelis Technologies and Japan Tobacco positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Axcelis Technologies position performs unexpectedly, Japan Tobacco 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 Japan Tobacco will offset losses from the drop in Japan Tobacco's long position.| Axcelis Technologies vs. Apple Inc | Axcelis Technologies vs. Apple Inc | Axcelis Technologies vs. Apple Inc | Axcelis Technologies vs. Apple Inc |
| Japan Tobacco vs. Norwegian Air Shuttle | Japan Tobacco vs. Nok Airlines PCL | Japan Tobacco vs. Pentair plc | Japan Tobacco vs. Gol Intelligent Airlines |
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 Suggestion module to get suggestions outside of your existing asset allocation including your own model portfolios.
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