Correlation Between TERADATA and Axcelis Technologies

Can any of the company-specific risk be diversified away by investing in both TERADATA 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 TERADATA and Axcelis Technologies into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between TERADATA and Axcelis Technologies, you can compare the effects of market volatilities on TERADATA 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 TERADATA with a short position of Axcelis Technologies. Check out your portfolio center. Please also check ongoing floating volatility patterns of TERADATA and Axcelis Technologies.

Diversification Opportunities for TERADATA and Axcelis Technologies

-0.55

Correlation Coefficient

TERADATA  Axcelis Technologies

Excellent diversification

The 3 months correlation between TERADATA and Axcelis is -0.55. Overlapping area represents the amount of risk that can be diversified away by holding TERADATA and Axcelis Technologies in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Axcelis Technologies and TERADATA 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 TERADATA 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 TERADATA i.e., TERADATA and Axcelis Technologies go up and down completely randomly.

Pair Corralation between TERADATA and Axcelis Technologies

Assuming the 90 days trading horizon TERADATA is expected to generate 23.81 times less return on investment than Axcelis Technologies. But when comparing it to its historical volatility, TERADATA is 3.05 times less risky than Axcelis Technologies. It trades about 0.0 of its potential returns per unit of risk. Axcelis Technologies is currently generating about 0.03 of returns per unit of risk over similar time horizon. If you would invest  6,934  in Axcelis Technologies on October 6, 2024 and sell it today you would earn a total of  54.00  from holding Axcelis Technologies or generate 0.78% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Very Weak
Accuracy	100.0%
Values	Daily Returns

TERADATA  vs.  Axcelis Technologies

TERADATA

Risk-Adjusted Performance

8 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in TERADATA are ranked lower than 8 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively fragile basic indicators, TERADATA may actually be approaching a critical reversion point that can send shares even higher in February 2025.

Axcelis Technologies

Risk-Adjusted Performance

0 of 100

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.

Pair Trading with TERADATA and Axcelis Technologies

The main advantage of trading using opposite TERADATA and Axcelis Technologies positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if TERADATA 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 TERADATA 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 Positions Ratings module to determine portfolio positions ratings based on digital equity recommendations. Macroaxis instant position ratings are based on combination of fundamental analysis and risk-adjusted market performance.