Correlation Between PURETECH HEALTH and Axcelis Technologies

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Can any of the company-specific risk be diversified away by investing in both PURETECH HEALTH 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 PURETECH HEALTH and Axcelis Technologies into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between PURETECH HEALTH PLC and Axcelis Technologies, you can compare the effects of market volatilities on PURETECH HEALTH 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 PURETECH HEALTH with a short position of Axcelis Technologies. Check out your portfolio center. Please also check ongoing floating volatility patterns of PURETECH HEALTH and Axcelis Technologies.

Diversification Opportunities for PURETECH HEALTH and Axcelis Technologies

-0.1
  Correlation Coefficient

Good diversification

The 3 months correlation between PURETECH and Axcelis is -0.1. Overlapping area represents the amount of risk that can be diversified away by holding PURETECH HEALTH PLC and Axcelis Technologies in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Axcelis Technologies and PURETECH HEALTH 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 PURETECH HEALTH PLC 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 PURETECH HEALTH i.e., PURETECH HEALTH and Axcelis Technologies go up and down completely randomly.

Pair Corralation between PURETECH HEALTH and Axcelis Technologies

Assuming the 90 days horizon PURETECH HEALTH PLC is expected to under-perform the Axcelis Technologies. But the stock apears to be less risky and, when comparing its historical volatility, PURETECH HEALTH PLC is 1.01 times less risky than Axcelis Technologies. The stock trades about -0.02 of its potential returns per unit of risk. The Axcelis Technologies is currently generating about -0.01 of returns per unit of risk over similar time horizon. If you would invest  9,920  in Axcelis Technologies on October 23, 2024 and sell it today you would lose (3,056) from holding Axcelis Technologies or give up 30.81% of portfolio value over 90 days.
Time Period3 Months [change]
DirectionMoves Against 
StrengthInsignificant
Accuracy100.0%
ValuesDaily Returns

PURETECH HEALTH PLC  vs.  Axcelis Technologies

 Performance 
       Timeline  
PURETECH HEALTH PLC 

Risk-Adjusted Performance

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Over the last 90 days PURETECH HEALTH PLC has generated negative risk-adjusted returns adding no value to investors with long positions. Despite latest uncertain performance, the Stock's basic indicators remain stable and the current disturbance on Wall Street may also be a sign of long-run gains for the company stockholders.
Axcelis Technologies 

Risk-Adjusted Performance

0 of 100

 
Weak
 
Strong
Very Weak
Over the last 90 days Axcelis Technologies has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of uncertain performance in the last few months, the Stock's basic indicators remain comparatively stable which may send shares a bit higher in February 2025. The newest uproar may also be a sign of mid-term up-swing for the firm private investors.

PURETECH HEALTH and Axcelis Technologies Volatility Contrast

   Predicted Return Density   
       Returns  

Pair Trading with PURETECH HEALTH and Axcelis Technologies

The main advantage of trading using opposite PURETECH HEALTH and Axcelis Technologies positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if PURETECH HEALTH 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 PURETECH HEALTH PLC 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.
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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 Pair Correlation module to compare performance and examine fundamental relationship between any two equity instruments.

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