Correlation Between Axcelis Technologies and Nomad Foods
Can any of the company-specific risk be diversified away by investing in both Axcelis Technologies and Nomad Foods 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 Axcelis Technologies and Nomad Foods into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Axcelis Technologies and Nomad Foods, you can compare the effects of market volatilities on Axcelis Technologies and Nomad Foods 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 Axcelis Technologies with a short position of Nomad Foods. Check out your portfolio center. Please also check ongoing floating volatility patterns of Axcelis Technologies and Nomad Foods.
Diversification Opportunities for Axcelis Technologies and Nomad Foods
0.06 | Correlation Coefficient |
Significant diversification
The 3 months correlation between Axcelis and Nomad is 0.06. Overlapping area represents the amount of risk that can be diversified away by holding Axcelis Technologies and Nomad Foods in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Nomad Foods and Axcelis Technologies 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 Axcelis Technologies are associated (or correlated) with Nomad Foods. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Nomad Foods has no effect on the direction of Axcelis Technologies i.e., Axcelis Technologies and Nomad Foods go up and down completely randomly.
Pair Corralation between Axcelis Technologies and Nomad Foods
Assuming the 90 days trading horizon Axcelis Technologies is expected to under-perform the Nomad Foods. In addition to that, Axcelis Technologies is 1.76 times more volatile than Nomad Foods. It trades about -0.16 of its total potential returns per unit of risk. Nomad Foods is currently generating about -0.06 per unit of volatility. If you would invest 1,674 in Nomad Foods on September 26, 2024 and sell it today you would lose (104.00) from holding Nomad Foods or give up 6.21% of portfolio value over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Together |
Strength | Insignificant |
Accuracy | 100.0% |
Values | Daily Returns |
Axcelis Technologies vs. Nomad Foods
Performance |
Timeline |
Axcelis Technologies |
Nomad Foods |
Axcelis Technologies and Nomad Foods Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with Axcelis Technologies and Nomad Foods
The main advantage of trading using opposite Axcelis Technologies and Nomad Foods positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Axcelis Technologies position performs unexpectedly, Nomad Foods 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 Nomad Foods will offset losses from the drop in Nomad Foods' long position.Axcelis Technologies vs. Apple Inc | Axcelis Technologies vs. Apple Inc | Axcelis Technologies vs. Apple Inc | Axcelis Technologies vs. Apple Inc |
Nomad Foods vs. Apple Inc | Nomad Foods vs. Apple Inc | Nomad Foods vs. Apple Inc | Nomad Foods vs. Apple Inc |
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 Portfolio Diagnostics module to use generated alerts and portfolio events aggregator to diagnose current holdings.
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