Correlation Between COSTCO WHOLESALE and Axcelis Technologies

Can any of the company-specific risk be diversified away by investing in both COSTCO 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 COSTCO 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 COSTCO WHOLESALE CDR and Axcelis Technologies, you can compare the effects of market volatilities on COSTCO 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 COSTCO WHOLESALE with a short position of Axcelis Technologies. Check out your portfolio center. Please also check ongoing floating volatility patterns of COSTCO WHOLESALE and Axcelis Technologies.

Diversification Opportunities for COSTCO WHOLESALE and Axcelis Technologies

-0.77

Correlation Coefficient

COSTCO WHOLESALE  Axcelis Technologies

Pay attention - limited upside

The 3 months correlation between COSTCO and Axcelis is -0.77. Overlapping area represents the amount of risk that can be diversified away by holding COSTCO WHOLESALE CDR and Axcelis Technologies in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Axcelis Technologies and COSTCO 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 COSTCO WHOLESALE CDR 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 COSTCO WHOLESALE i.e., COSTCO WHOLESALE and Axcelis Technologies go up and down completely randomly.

Pair Corralation between COSTCO WHOLESALE and Axcelis Technologies

Assuming the 90 days trading horizon COSTCO WHOLESALE CDR is expected to generate 0.58 times more return on investment than Axcelis Technologies. However, COSTCO WHOLESALE CDR is 1.73 times less risky than Axcelis Technologies. It trades about 0.08 of its potential returns per unit of risk. Axcelis Technologies is currently generating about -0.16 per unit of risk. If you would invest  2,715  in COSTCO WHOLESALE CDR on September 25, 2024 and sell it today you would earn a total of  205.00  from holding COSTCO WHOLESALE CDR or generate 7.55% return on investment over 90 days.

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

COSTCO WHOLESALE CDR  vs.  Axcelis Technologies

COSTCO WHOLESALE CDR

Risk-Adjusted Performance

6 of 100

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in COSTCO WHOLESALE CDR are ranked lower than 6 (%) of all global equities and portfolios over the last 90 days. Despite nearly fragile basic indicators, COSTCO WHOLESALE may actually be approaching a critical reversion point that can send shares even higher in January 2025.

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 COSTCO WHOLESALE and Axcelis Technologies

The main advantage of trading using opposite COSTCO WHOLESALE and Axcelis Technologies positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if COSTCO 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 COSTCO WHOLESALE CDR 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 Efficient Frontier module to plot and analyze your portfolio and positions against risk-return landscape of the market..