Correlation Between Axcelis Technologies and Walmart
Can any of the company-specific risk be diversified away by investing in both Axcelis Technologies and Walmart 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 Walmart into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Axcelis Technologies and Walmart, you can compare the effects of market volatilities on Axcelis Technologies and Walmart 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 Walmart. Check out your portfolio center. Please also check ongoing floating volatility patterns of Axcelis Technologies and Walmart.
Diversification Opportunities for Axcelis Technologies and Walmart
-0.85 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between Axcelis and Walmart is -0.85. Overlapping area represents the amount of risk that can be diversified away by holding Axcelis Technologies and Walmart in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Walmart 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 Walmart. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Walmart has no effect on the direction of Axcelis Technologies i.e., Axcelis Technologies and Walmart go up and down completely randomly.
Pair Corralation between Axcelis Technologies and Walmart
Assuming the 90 days trading horizon Axcelis Technologies is expected to under-perform the Walmart. In addition to that, Axcelis Technologies is 2.12 times more volatile than Walmart. It trades about -0.1 of its total potential returns per unit of risk. Walmart is currently generating about 0.25 per unit of volatility. If you would invest 7,460 in Walmart on October 21, 2024 and sell it today you would earn a total of 1,495 from holding Walmart or generate 20.04% return on investment over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Against |
Strength | Significant |
Accuracy | 100.0% |
Values | Daily Returns |
Axcelis Technologies vs. Walmart
Performance |
Timeline |
Axcelis Technologies |
Walmart |
Axcelis Technologies and Walmart Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with Axcelis Technologies and Walmart
The main advantage of trading using opposite Axcelis Technologies and Walmart positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Axcelis Technologies position performs unexpectedly, Walmart 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 Walmart will offset losses from the drop in Walmart's long position.Axcelis Technologies vs. Sunny Optical Technology | Axcelis Technologies vs. Alfa Financial Software | Axcelis Technologies vs. MGIC INVESTMENT | Axcelis Technologies vs. SEI INVESTMENTS |
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Check out your portfolio center.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 Funds Screener module to find actively-traded funds from around the world traded on over 30 global exchanges.
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