Correlation Between Axcelis Technologies and Ross Stores

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

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

Diversification Opportunities for Axcelis Technologies and Ross Stores

0.92

Correlation Coefficient

Axcelis Technologies  Ross Stores

Almost no diversification

The 3 months correlation between Axcelis and Ross is 0.92. Overlapping area represents the amount of risk that can be diversified away by holding Axcelis Technologies and Ross Stores in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Ross Stores 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 Ross Stores. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Ross Stores has no effect on the direction of Axcelis Technologies i.e., Axcelis Technologies and Ross Stores go up and down completely randomly.

Pair Corralation between Axcelis Technologies and Ross Stores

Assuming the 90 days trading horizon Axcelis Technologies is expected to under-perform the Ross Stores. In addition to that, Axcelis Technologies is 1.65 times more volatile than Ross Stores. It trades about -0.21 of its total potential returns per unit of risk. Ross Stores is currently generating about -0.23 per unit of volatility. If you would invest  14,574  in Ross Stores on December 30, 2024 and sell it today you would lose (2,640) from holding Ross Stores or give up 18.11% of portfolio value over 90 days.

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

Axcelis Technologies  vs.  Ross Stores

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 uncertain 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.

Ross Stores

Risk-Adjusted Performance

Very Weak

Over the last 90 days Ross Stores 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 April 2025. The newest uproar may also be a sign of mid-term up-swing for the firm private investors.

Pair Trading with Axcelis Technologies and Ross Stores

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

The idea behind Axcelis Technologies and Ross Stores 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 Portfolio Diagnostics module to use generated alerts and portfolio events aggregator to diagnose current holdings.