Correlation Between Coupa Software and Axcelis Technologies

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

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

Diversification Opportunities for Coupa Software and Axcelis Technologies

-0.03

Correlation Coefficient

Coupa Software  Axcelis Technologies

Good diversification

The 3 months correlation between Coupa and Axcelis is -0.03. Overlapping area represents the amount of risk that can be diversified away by holding Coupa Software and Axcelis Technologies in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Axcelis Technologies and Coupa Software 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 Coupa Software 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 Coupa Software i.e., Coupa Software and Axcelis Technologies go up and down completely randomly.

Pair Corralation between Coupa Software and Axcelis Technologies

If you would invest  11,196  in Axcelis Technologies on March 13, 2024 and sell it today you would earn a total of  1,524  from holding Axcelis Technologies or generate 13.61% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Insignificant
Accuracy	4.76%
Values	Daily Returns

Coupa Software  vs.  Axcelis Technologies

Coupa Software

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Coupa Software has generated negative risk-adjusted returns adding no value to investors with long positions. Even with relatively invariable basic indicators, Coupa Software is not utilizing all of its potentials. The current stock price agitation, may contribute to short-term losses for the retail investors.

Axcelis Technologies

Risk-Adjusted Performance

8 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Axcelis Technologies are ranked lower than 8 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively unfluctuating essential indicators, Axcelis Technologies unveiled solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Coupa Software and Axcelis Technologies

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

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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 Volatility Analysis module to get historical volatility and risk analysis based on latest market data.