Correlation Between TITAN MACHINERY and Axcelis Technologies

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

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

Diversification Opportunities for TITAN MACHINERY and Axcelis Technologies

-0.65

Correlation Coefficient

TITAN MACHINERY  Axcelis Technologies

Excellent diversification

The 3 months correlation between TITAN and Axcelis is -0.65. Overlapping area represents the amount of risk that can be diversified away by holding TITAN MACHINERY and Axcelis Technologies in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Axcelis Technologies and TITAN MACHINERY 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 TITAN MACHINERY 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 TITAN MACHINERY i.e., TITAN MACHINERY and Axcelis Technologies go up and down completely randomly.

Pair Corralation between TITAN MACHINERY and Axcelis Technologies

Assuming the 90 days trading horizon TITAN MACHINERY is expected to generate 1.18 times more return on investment than Axcelis Technologies. However, TITAN MACHINERY is 1.18 times more volatile than Axcelis Technologies. It trades about 0.06 of its potential returns per unit of risk. Axcelis Technologies is currently generating about -0.19 per unit of risk. If you would invest  1,350  in TITAN MACHINERY on August 31, 2024 and sell it today you would earn a total of  130.00  from holding TITAN MACHINERY or generate 9.63% return on investment over 90 days.

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

TITAN MACHINERY  vs.  Axcelis Technologies

TITAN MACHINERY

Risk-Adjusted Performance

4 of 100

Insignificant

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

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 basic indicators remain comparatively stable which may send shares a bit higher in December 2024. The newest uproar may also be a sign of mid-term up-swing for the firm private investors.

Pair Trading with TITAN MACHINERY and Axcelis Technologies

The main advantage of trading using opposite TITAN MACHINERY and Axcelis Technologies positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if TITAN MACHINERY 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 TITAN MACHINERY 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 Funds Screener module to find actively-traded funds from around the world traded on over 30 global exchanges.