Correlation Between Cementos Pacasmayo and Axcelis Technologies

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Can any of the company-specific risk be diversified away by investing in both Cementos Pacasmayo 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 Cementos Pacasmayo and Axcelis Technologies into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Cementos Pacasmayo SAA and Axcelis Technologies, you can compare the effects of market volatilities on Cementos Pacasmayo 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 Cementos Pacasmayo with a short position of Axcelis Technologies. Check out your portfolio center. Please also check ongoing floating volatility patterns of Cementos Pacasmayo and Axcelis Technologies.

Diversification Opportunities for Cementos Pacasmayo and Axcelis Technologies

-0.66
  Correlation Coefficient

Excellent diversification

The 3 months correlation between Cementos and Axcelis is -0.66. Overlapping area represents the amount of risk that can be diversified away by holding Cementos Pacasmayo SAA and Axcelis Technologies in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Axcelis Technologies and Cementos Pacasmayo 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 Cementos Pacasmayo SAA 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 Cementos Pacasmayo i.e., Cementos Pacasmayo and Axcelis Technologies go up and down completely randomly.

Pair Corralation between Cementos Pacasmayo and Axcelis Technologies

Given the investment horizon of 90 days Cementos Pacasmayo is expected to generate 2.53 times less return on investment than Axcelis Technologies. But when comparing it to its historical volatility, Cementos Pacasmayo SAA is 1.76 times less risky than Axcelis Technologies. It trades about 0.04 of its potential returns per unit of risk. Axcelis Technologies is currently generating about 0.06 of returns per unit of risk over similar time horizon. If you would invest  5,454  in Axcelis Technologies on December 29, 2023 and sell it today you would earn a total of  5,793  from holding Axcelis Technologies or generate 106.22% return on investment over 90 days.
Time Period3 Months [change]
DirectionMoves Against 
StrengthWeak
Accuracy100.0%
ValuesDaily Returns

Cementos Pacasmayo SAA  vs.  Axcelis Technologies

 Performance 
       Timeline  
Cementos Pacasmayo SAA 

Risk-Adjusted Performance

11 of 100

 
Low
 
High
Good
Compared to the overall equity markets, risk-adjusted returns on investments in Cementos Pacasmayo SAA are ranked lower than 11 (%) of all global equities and portfolios over the last 90 days. In spite of rather unsteady basic indicators, Cementos Pacasmayo exhibited solid returns over the last few months and may actually be approaching a breakup point.
Axcelis Technologies 

Risk-Adjusted Performance

0 of 100

 
Low
 
High
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 latest unfluctuating performance, the Stock's essential indicators remain stable and the newest uproar on Wall Street may also be a sign of mid-term gains for the firm private investors.

Cementos Pacasmayo and Axcelis Technologies Volatility Contrast

   Predicted Return Density   
       Returns  

Pair Trading with Cementos Pacasmayo and Axcelis Technologies

The main advantage of trading using opposite Cementos Pacasmayo and Axcelis Technologies positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Cementos Pacasmayo 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 Cementos Pacasmayo SAA 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 Fundamental Analysis module to view fundamental data based on most recent published financial statements.

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