Correlation Between Aluminumof China and Axcelis Technologies

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

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

Diversification Opportunities for Aluminumof China and Axcelis Technologies

0.37

Correlation Coefficient

Aluminumof China  Axcelis Technologies

Weak diversification

The 3 months correlation between Aluminumof and Axcelis is 0.37. Overlapping area represents the amount of risk that can be diversified away by holding Aluminum of and Axcelis Technologies in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Axcelis Technologies and Aluminumof China 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 Aluminum of 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 Aluminumof China i.e., Aluminumof China and Axcelis Technologies go up and down completely randomly.

Pair Corralation between Aluminumof China and Axcelis Technologies

Assuming the 90 days horizon Aluminum of is expected to under-perform the Axcelis Technologies. But the stock apears to be less risky and, when comparing its historical volatility, Aluminum of is 1.28 times less risky than Axcelis Technologies. The stock trades about -0.19 of its potential returns per unit of risk. The Axcelis Technologies is currently generating about -0.14 of returns per unit of risk over similar time horizon. If you would invest  7,360  in Axcelis Technologies on September 25, 2024 and sell it today you would lose (632.00) from holding Axcelis Technologies or give up 8.59% of portfolio value over 90 days.

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

Aluminum of  vs.  Axcelis Technologies

Aluminumof China

Risk-Adjusted Performance

2 of 100

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in Aluminum of are ranked lower than 2 (%) of all global equities and portfolios over the last 90 days. Despite nearly fragile basic indicators, Aluminumof China may actually be approaching a critical reversion point that can send shares even higher in January 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 January 2025. The newest uproar may also be a sign of mid-term up-swing for the firm private investors.

Pair Trading with Aluminumof China and Axcelis Technologies

The main advantage of trading using opposite Aluminumof China and Axcelis Technologies positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Aluminumof China 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 Aluminum of 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 Competition Analyzer module to analyze and compare many basic indicators for a group of related or unrelated entities.