Correlation Between InTest and Axcelis Technologies

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

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

Diversification Opportunities for InTest and Axcelis Technologies

-0.29

Correlation Coefficient

InTest  Axcelis Technologies

Very good diversification

The 3 months correlation between InTest and Axcelis is -0.29. Overlapping area represents the amount of risk that can be diversified away by holding inTest and Axcelis Technologies in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Axcelis Technologies and InTest 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 inTest 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 InTest i.e., InTest and Axcelis Technologies go up and down completely randomly.

Pair Corralation between InTest and Axcelis Technologies

Given the investment horizon of 90 days inTest is expected to under-perform the Axcelis Technologies. In addition to that, InTest is 1.35 times more volatile than Axcelis Technologies. It trades about -0.08 of its total potential returns per unit of risk. Axcelis Technologies is currently generating about 0.03 per unit of volatility. If you would invest  11,863  in Axcelis Technologies on March 7, 2024 and sell it today you would earn a total of  250.00  from holding Axcelis Technologies or generate 2.11% return on investment over 90 days.

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

inTest  vs.  Axcelis Technologies

inTest

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days inTest 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 July 2024. The newest uproar may also be a sign of mid-term up-swing for the firm private investors.

Axcelis Technologies

Risk-Adjusted Performance

1 of 100

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in Axcelis Technologies are ranked lower than 1 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively stable essential indicators, Axcelis Technologies is not utilizing all of its potentials. The newest stock price uproar, may contribute to short-horizon losses for the private investors.

Pair Trading with InTest and Axcelis Technologies

The main advantage of trading using opposite InTest and Axcelis Technologies positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if InTest 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 inTest 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.

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 Portfolio Comparator module to compare the composition, asset allocations and performance of any two portfolios in your account.