Correlation Between BJs Wholesale and Axcelis Technologies

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

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

Diversification Opportunities for BJs Wholesale and Axcelis Technologies

-0.82

Correlation Coefficient

BJs Wholesale  Axcelis Technologies

Pay attention - limited upside

The 3 months correlation between BJs and Axcelis is -0.82. Overlapping area represents the amount of risk that can be diversified away by holding BJs Wholesale Club and Axcelis Technologies in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Axcelis Technologies and BJs Wholesale 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 BJs Wholesale Club 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 BJs Wholesale i.e., BJs Wholesale and Axcelis Technologies go up and down completely randomly.

Pair Corralation between BJs Wholesale and Axcelis Technologies

Assuming the 90 days horizon BJs Wholesale Club is expected to generate 0.43 times more return on investment than Axcelis Technologies. However, BJs Wholesale Club is 2.32 times less risky than Axcelis Technologies. It trades about -0.17 of its potential returns per unit of risk. Axcelis Technologies is currently generating about -0.14 per unit of risk. If you would invest  9,350  in BJs Wholesale Club on September 25, 2024 and sell it today you would lose (400.00) from holding BJs Wholesale Club or give up 4.28% of portfolio value over 90 days.

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

BJs Wholesale Club  vs.  Axcelis Technologies

BJs Wholesale Club

Risk-Adjusted Performance

14 of 100

Good

Compared to the overall equity markets, risk-adjusted returns on investments in BJs Wholesale Club are ranked lower than 14 (%) of all global equities and portfolios over the last 90 days. Despite nearly fragile basic indicators, BJs Wholesale reported solid returns over the last few months and may actually be approaching a breakup point.

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 fragile performance in the last few months, the Stock's basic indicators remain comparatively stable which may send shares a bit higher in January 2025. The newest uproar may also be a sign of mid-term up-swing for the firm private investors.

Pair Trading with BJs Wholesale and Axcelis Technologies

The main advantage of trading using opposite BJs Wholesale and Axcelis Technologies positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if BJs Wholesale 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 BJs Wholesale Club 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 Share Portfolio module to track or share privately all of your investments from the convenience of any device.