Correlation Between Axcelis Technologies and Bank of Montreal

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

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

Diversification Opportunities for Axcelis Technologies and Bank of Montreal

-0.69

Correlation Coefficient

Axcelis Technologies  Bank of Montreal

Excellent diversification

The 3 months correlation between Axcelis and Bank is -0.69. Overlapping area represents the amount of risk that can be diversified away by holding Axcelis Technologies and Bank of Montreal in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Bank of Montreal 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 Bank of Montreal. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Bank of Montreal has no effect on the direction of Axcelis Technologies i.e., Axcelis Technologies and Bank of Montreal go up and down completely randomly.

Pair Corralation between Axcelis Technologies and Bank of Montreal

Assuming the 90 days trading horizon Axcelis Technologies is expected to under-perform the Bank of Montreal. In addition to that, Axcelis Technologies is 2.01 times more volatile than Bank of Montreal. It trades about -0.34 of its total potential returns per unit of risk. Bank of Montreal is currently generating about 0.11 per unit of volatility. If you would invest  9,554  in Bank of Montreal on December 2, 2024 and sell it today you would earn a total of  308.00  from holding Bank of Montreal or generate 3.22% return on investment over 90 days.

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

Axcelis Technologies  vs.  Bank of Montreal

Axcelis Technologies

Risk-Adjusted Performance

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 April 2025. The newest uproar may also be a sign of mid-term up-swing for the firm private investors.

Bank of Montreal

Risk-Adjusted Performance

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Bank of Montreal are ranked lower than 9 (%) of all global equities and portfolios over the last 90 days. Despite nearly fragile basic indicators, Bank of Montreal may actually be approaching a critical reversion point that can send shares even higher in April 2025.

Pair Trading with Axcelis Technologies and Bank of Montreal

The main advantage of trading using opposite Axcelis Technologies and Bank of Montreal positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Axcelis Technologies position performs unexpectedly, Bank of Montreal 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 Bank of Montreal will offset losses from the drop in Bank of Montreal's long position.

The idea behind Axcelis Technologies and Bank of Montreal 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 Instant Ratings module to determine any equity ratings based on digital recommendations. Macroaxis instant equity ratings are based on combination of fundamental analysis and risk-adjusted market performance.