Correlation Between Axcelis Tech and Avnet

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Can any of the company-specific risk be diversified away by investing in both Axcelis Tech and Avnet 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 Tech and Avnet into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Axcelis Tech and Avnet Inc, you can compare the effects of market volatilities on Axcelis Tech and Avnet 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 Tech with a short position of Avnet. Check out your portfolio center. Please also check ongoing floating volatility patterns of Axcelis Tech and Avnet.

Diversification Opportunities for Axcelis Tech and Avnet

0.5
  Correlation Coefficient

Very weak diversification

The 3 months correlation between Axcelis and Avnet is 0.5. Overlapping area represents the amount of risk that can be diversified away by holding Axcelis Tech and Avnet Inc in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Avnet Inc and Axcelis Tech 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 Tech are associated (or correlated) with Avnet. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Avnet Inc has no effect on the direction of Axcelis Tech i.e., Axcelis Tech and Avnet go up and down completely randomly.

Pair Corralation between Axcelis Tech and Avnet

Given the investment horizon of 90 days Axcelis Tech is expected to generate 2.04 times more return on investment than Avnet. However, Axcelis Tech is 2.04 times more volatile than Avnet Inc. It trades about 0.04 of its potential returns per unit of risk. Avnet Inc is currently generating about -0.02 per unit of risk. If you would invest  4,556  in Axcelis Tech on July 2, 2022 and sell it today you would earn a total of  1,500  from holding Axcelis Tech or generate 32.92% return on investment over 90 days.
Time Period3 Months [change]
DirectionMoves Together 
StrengthWeak
Accuracy100.0%
ValuesDaily Returns

Axcelis Tech  vs.  Avnet Inc

 Performance (%) 
       Timeline  
Axcelis Tech 
Axcelis Performance
7 of 100
Compared to the overall equity markets, risk-adjusted returns on investments in Axcelis Tech are ranked lower than 7 (%) of all global equities and portfolios over the last 90 days. Even with relatively conflicting essential indicators, Axcelis Tech reported solid returns over the last few months and may actually be approaching a breakup point.

Axcelis Price Channel

Avnet Inc 
Avnet Performance
0 of 100
Over the last 90 days Avnet Inc has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of conflicting performance in the last few months, the Stock's basic indicators remain comparatively stable which may send shares a bit higher in October 2022. The newest uproar may also be a sign of mid-term up-swing for the firm private investors.

Avnet Price Channel

Axcelis Tech and Avnet Volatility Contrast

   Predicted Return Density   
       Returns  

Pair Trading with Axcelis Tech and Avnet

The main advantage of trading using opposite Axcelis Tech and Avnet positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Axcelis Tech position performs unexpectedly, Avnet 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 Avnet will offset losses from the drop in Avnet's long position.
Axcelis Tech vs. Amazon Inc
The idea behind Axcelis Tech and Avnet Inc 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.
Avnet vs. Amazon 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 Headlines Timeline module to stay connected to all market stories and filter out noise. Drill down to analyze hype elasticity.

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