Correlation Between COPLAND ROAD and Axcelis Technologies

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

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

Diversification Opportunities for COPLAND ROAD and Axcelis Technologies

0.35

Correlation Coefficient

COPLAND ROAD  Axcelis Technologies

Weak diversification

The 3 months correlation between COPLAND and Axcelis is 0.35. Overlapping area represents the amount of risk that can be diversified away by holding COPLAND ROAD CAPITAL and Axcelis Technologies in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Axcelis Technologies and COPLAND ROAD 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 COPLAND ROAD CAPITAL 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 COPLAND ROAD i.e., COPLAND ROAD and Axcelis Technologies go up and down completely randomly.

Pair Corralation between COPLAND ROAD and Axcelis Technologies

Assuming the 90 days horizon COPLAND ROAD CAPITAL is expected to generate 0.88 times more return on investment than Axcelis Technologies. However, COPLAND ROAD CAPITAL is 1.13 times less risky than Axcelis Technologies. It trades about -0.02 of its potential returns per unit of risk. Axcelis Technologies is currently generating about -0.16 per unit of risk. If you would invest  4,660  in COPLAND ROAD CAPITAL on September 26, 2024 and sell it today you would lose (225.00) from holding COPLAND ROAD CAPITAL or give up 4.83% of portfolio value over 90 days.

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

COPLAND ROAD CAPITAL  vs.  Axcelis Technologies

COPLAND ROAD CAPITAL

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days COPLAND ROAD CAPITAL has generated negative risk-adjusted returns adding no value to investors with long positions. Despite nearly stable basic indicators, COPLAND ROAD is not utilizing all of its potentials. The current stock price disturbance, may contribute to mid-run losses for the stockholders.

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 uncertain 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 COPLAND ROAD and Axcelis Technologies

The main advantage of trading using opposite COPLAND ROAD and Axcelis Technologies positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if COPLAND ROAD 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 COPLAND ROAD CAPITAL 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 Watchlist Optimization module to optimize watchlists to build efficient portfolios or rebalance existing positions based on the mean-variance optimization algorithm.