Correlation Between AXT and UNITIL
Can any of the company-specific risk be diversified away by investing in both AXT and UNITIL 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 AXT and UNITIL into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between AXT Inc and UNITIL, you can compare the effects of market volatilities on AXT and UNITIL 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 AXT with a short position of UNITIL. Check out your portfolio center. Please also check ongoing floating volatility patterns of AXT and UNITIL.
Diversification Opportunities for AXT and UNITIL
Modest diversification
The 3 months correlation between AXT and UNITIL is 0.24. Overlapping area represents the amount of risk that can be diversified away by holding AXT Inc and UNITIL in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on UNITIL and AXT 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 AXT Inc are associated (or correlated) with UNITIL. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of UNITIL has no effect on the direction of AXT i.e., AXT and UNITIL go up and down completely randomly.
Pair Corralation between AXT and UNITIL
Given the investment horizon of 90 days AXT Inc is expected to generate 5.87 times more return on investment than UNITIL. However, AXT is 5.87 times more volatile than UNITIL. It trades about 0.46 of its potential returns per unit of risk. UNITIL is currently generating about 0.04 per unit of risk. If you would invest 403.00 in AXT Inc on October 10, 2025 and sell it today you would earn a total of 2,008 from holding AXT Inc or generate 498.26% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
AXT Inc vs. UNITIL
Performance |
| Timeline |
| AXT Inc |
| UNITIL |
AXT and UNITIL Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with AXT and UNITIL
The main advantage of trading using opposite AXT and UNITIL positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if AXT position performs unexpectedly, UNITIL 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 UNITIL will offset losses from the drop in UNITIL's long position.The idea behind AXT Inc and UNITIL 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.| UNITIL vs. Middlesex Water | UNITIL vs. Entergy Arkansas LLC | UNITIL vs. Energy Vault Holdings | UNITIL vs. Consolidated Water Co |
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 Cryptocurrency Center module to build and monitor diversified portfolio of extremely risky digital assets and cryptocurrency.
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