Correlation Between Montauk Renewables and Axcella Health

Specify exactly 2 symbols:
Can any of the company-specific risk be diversified away by investing in both Montauk Renewables and Axcella Health 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 Montauk Renewables and Axcella Health into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Montauk Renewables and Axcella Health, you can compare the effects of market volatilities on Montauk Renewables and Axcella Health 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 Montauk Renewables with a short position of Axcella Health. Check out your portfolio center. Please also check ongoing floating volatility patterns of Montauk Renewables and Axcella Health.

Diversification Opportunities for Montauk Renewables and Axcella Health

0.77
  Correlation Coefficient

Poor diversification

The 3 months correlation between Montauk and Axcella is 0.77. Overlapping area represents the amount of risk that can be diversified away by holding Montauk Renewables and Axcella Health in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Axcella Health and Montauk Renewables 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 Montauk Renewables are associated (or correlated) with Axcella Health. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Axcella Health has no effect on the direction of Montauk Renewables i.e., Montauk Renewables and Axcella Health go up and down completely randomly.

Pair Corralation between Montauk Renewables and Axcella Health

Given the investment horizon of 90 days Montauk Renewables is expected to generate 0.72 times more return on investment than Axcella Health. However, Montauk Renewables is 1.39 times less risky than Axcella Health. It trades about -0.22 of its potential returns per unit of risk. Axcella Health is currently generating about -0.25 per unit of risk. If you would invest  1,803  in Montauk Renewables on September 3, 2022 and sell it today you would lose (688.00)  from holding Montauk Renewables or give up 38.16% of portfolio value over 90 days.
Time Period3 Months [change]
DirectionMoves Together 
StrengthSignificant
Accuracy97.73%
ValuesDaily Returns

Montauk Renewables  vs.  Axcella Health

 Performance (%) 
       Timeline  
Montauk Renewables 
Montauk Performance
0 of 100
Over the last 90 days Montauk Renewables has generated negative risk-adjusted returns adding no value to investors with long positions. Despite unsteady performance in the last few months, the Stock's basic indicators remain fairly strong which may send shares a bit higher in January 2023. The recent confusion may also be a sign of long-lasting up-swing for the firm traders.

Montauk Price Channel

Axcella Health 
Axcella Performance
0 of 100
Over the last 90 days Axcella Health has generated negative risk-adjusted returns adding no value to investors with long positions. Despite unsteady performance in the last few months, the Stock's essential indicators remain somewhat strong which may send shares a bit higher in January 2023. The current disturbance may also be a sign of long term up-swing for the company investors.

Axcella Price Channel

Montauk Renewables and Axcella Health Volatility Contrast

   Predicted Return Density   
       Returns  

Pair Trading with Montauk Renewables and Axcella Health

The main advantage of trading using opposite Montauk Renewables and Axcella Health positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Montauk Renewables position performs unexpectedly, Axcella Health 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 Axcella Health will offset losses from the drop in Axcella Health's long position.
Montauk Renewables vs. Sempra Energy
Montauk Renewables vs. Best Buy Co
Montauk Renewables vs. SCOR PK
Montauk Renewables vs. Unified Series Trust
The idea behind Montauk Renewables and Axcella Health 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.
Axcella Health vs. Northwest Healthcare Properties
Axcella Health vs. Anheuser Busch Inbev
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 Portfolio Manager module to state of the art Portfolio Manager to monitor and improve performance of your invested capital.

Other Complementary Tools

Fundamentals Comparison
Compare fundamentals across multiple equities to find investing opportunities
Go
Money Flow Index
Determine momentum by analyzing Money Flow Index and other technical indicators
Go
Commodity Channel Index
Use Commodity Channel Index to analyze current equity momentum
Go
Portfolio Rebalancing
Analyze risk-adjusted returns against different time horizons to find asset-allocation targets
Go
Earnings Calls
Check upcoming earnings announcements updated hourly across public exchanges
Go
Insider Screener
Find insiders across different sectors to evaluate their impact on performance
Go
Positions Ratings
Determine portfolio positions ratings based on digital equity recommendations. Macroaxis instant position ratings are based on combination of fundamental analysis and risk-adjusted market performance
Go
Global Correlations
Find global opportunities by holding instruments from different markets
Go
Portfolio Diagnostics
Use generated alerts and portfolio events aggregator to diagnose current holdings
Go
Portfolio Suggestion
Get suggestions outside of your existing asset allocation including your own model portfolios
Go
Theme Ratings
Determine theme ratings based on digital equity recommendations. Macroaxis theme ratings are based on combination of fundamental analysis and risk-adjusted market performance
Go
Pattern Recognition
Use different Pattern Recognition models to time the market across multiple global exchanges
Go
Idea Analyzer
Analyze all characteristics, volatility and risk-adjusted return of Macroaxis ideas
Go