Correlation Between Axcelis Technologies and Summit Materials

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

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

Diversification Opportunities for Axcelis Technologies and Summit Materials

-0.65

Correlation Coefficient

Axcelis Technologies  Summit Materials

Excellent diversification

The 3 months correlation between Axcelis and Summit is -0.65. Overlapping area represents the amount of risk that can be diversified away by holding Axcelis Technologies and Summit Materials in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Summit Materials 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 Summit Materials. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Summit Materials has no effect on the direction of Axcelis Technologies i.e., Axcelis Technologies and Summit Materials go up and down completely randomly.

Pair Corralation between Axcelis Technologies and Summit Materials

Given the investment horizon of 90 days Axcelis Technologies is expected to generate 1.35 times more return on investment than Summit Materials. However, Axcelis Technologies is 1.35 times more volatile than Summit Materials. It trades about 0.07 of its potential returns per unit of risk. Summit Materials is currently generating about 0.07 per unit of risk. If you would invest  5,736  in Axcelis Technologies on January 26, 2024 and sell it today you would earn a total of  4,132  from holding Axcelis Technologies or generate 72.04% 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.  Summit Materials

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 unsteady performance in the last few months, the Stock's essential indicators remain comparatively stable which may send shares a bit higher in May 2024. The newest uproar may also be a sign of mid-term up-swing for the firm private investors.

Summit Materials

Risk-Adjusted Performance

4 of 100

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in Summit Materials are ranked lower than 4 (%) of all global equities and portfolios over the last 90 days. In spite of very weak basic indicators, Summit Materials may actually be approaching a critical reversion point that can send shares even higher in May 2024.

Pair Trading with Axcelis Technologies and Summit Materials

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

The idea behind Axcelis Technologies and Summit Materials 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 ETF Categories module to list of ETF categories grouped based on various criteria, such as the investment strategy or type of investments.