Correlation Between Infrastrutture Wireless and Axcelis Technologies

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

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

Diversification Opportunities for Infrastrutture Wireless and Axcelis Technologies

0.92

Correlation Coefficient

Infrastrutture Wireless  Axcelis Technologies

Almost no diversification

The 3 months correlation between Infrastrutture and Axcelis is 0.92. Overlapping area represents the amount of risk that can be diversified away by holding Infrastrutture Wireless Italia and Axcelis Technologies in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Axcelis Technologies and Infrastrutture Wireless 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 Infrastrutture Wireless Italiane 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 Infrastrutture Wireless i.e., Infrastrutture Wireless and Axcelis Technologies go up and down completely randomly.

Pair Corralation between Infrastrutture Wireless and Axcelis Technologies

Assuming the 90 days horizon Infrastrutture Wireless is expected to generate 1.41 times less return on investment than Axcelis Technologies. But when comparing it to its historical volatility, Infrastrutture Wireless Italiane is 2.82 times less risky than Axcelis Technologies. It trades about 0.02 of its potential returns per unit of risk. Axcelis Technologies is currently generating about 0.01 of returns per unit of risk over similar time horizon. If you would invest  7,430  in Axcelis Technologies on September 25, 2024 and sell it today you would lose (702.00) from holding Axcelis Technologies or give up 9.45% of portfolio value over 90 days.

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

Infrastrutture Wireless Italia  vs.  Axcelis Technologies

Infrastrutture Wireless

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Infrastrutture Wireless Italiane has generated negative risk-adjusted returns adding no value to investors with long positions. Despite uncertain performance in the last few months, the Stock's basic indicators remain nearly stable which may send shares a bit higher in January 2025. The current disturbance may also be a sign of long-run up-swing for the company stockholders.

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 fragile 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 Infrastrutture Wireless and Axcelis Technologies

The main advantage of trading using opposite Infrastrutture Wireless and Axcelis Technologies positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Infrastrutture Wireless 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 Infrastrutture Wireless Italiane 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 Equity Analysis module to research over 250,000 global equities including funds, stocks and ETFs to find investment opportunities.