Correlation Between Axcelis Technologies and National Retail

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

By analyzing existing cross correlation between Axcelis Technologies and National Retail Properties, you can compare the effects of market volatilities on Axcelis Technologies and National Retail 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 National Retail. Check out your portfolio center. Please also check ongoing floating volatility patterns of Axcelis Technologies and National Retail.

Diversification Opportunities for Axcelis Technologies and National Retail

0.66

Correlation Coefficient

Axcelis Technologies  National Retail

Poor diversification

The 3 months correlation between Axcelis and National is 0.66. Overlapping area represents the amount of risk that can be diversified away by holding Axcelis Technologies and National Retail Properties in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on National Retail Prop 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 National Retail. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of National Retail Prop has no effect on the direction of Axcelis Technologies i.e., Axcelis Technologies and National Retail go up and down completely randomly.

Pair Corralation between Axcelis Technologies and National Retail

Assuming the 90 days trading horizon Axcelis Technologies is expected to under-perform the National Retail. In addition to that, Axcelis Technologies is 1.8 times more volatile than National Retail Properties. It trades about -0.18 of its total potential returns per unit of risk. National Retail Properties is currently generating about -0.11 per unit of volatility. If you would invest  4,284  in National Retail Properties on September 23, 2024 and sell it today you would lose (462.00) from holding National Retail Properties or give up 10.78% of portfolio value over 90 days.

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

Axcelis Technologies  vs.  National Retail Properties

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.

National Retail Prop

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days National Retail Properties has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of latest fragile performance, the Stock's basic indicators remain stable and the newest uproar on Wall Street may also be a sign of mid-term gains for the firm private investors.

Pair Trading with Axcelis Technologies and National Retail

The main advantage of trading using opposite Axcelis Technologies and National Retail positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Axcelis Technologies position performs unexpectedly, National Retail 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 National Retail will offset losses from the drop in National Retail's long position.

The idea behind Axcelis Technologies and National Retail Properties 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 Technical Analysis module to check basic technical indicators and analysis based on most latest market data.