Correlation Between Axcelis Technologies and Photronics
Can any of the company-specific risk be diversified away by investing in both Axcelis Technologies and Photronics 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 Photronics into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Axcelis Technologies and Photronics, you can compare the effects of market volatilities on Axcelis Technologies and Photronics 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 Photronics. Check out your portfolio center. Please also check ongoing floating volatility patterns of Axcelis Technologies and Photronics.
Diversification Opportunities for Axcelis Technologies and Photronics
0.1 | Correlation Coefficient |
Average diversification
The 3 months correlation between Axcelis and Photronics is 0.1. Overlapping area represents the amount of risk that can be diversified away by holding Axcelis Technologies and Photronics in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Photronics 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 Photronics. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Photronics has no effect on the direction of Axcelis Technologies i.e., Axcelis Technologies and Photronics go up and down completely randomly.
Pair Corralation between Axcelis Technologies and Photronics
Given the investment horizon of 90 days Axcelis Technologies is expected to under-perform the Photronics. But the stock apears to be less risky and, when comparing its historical volatility, Axcelis Technologies is 1.04 times less risky than Photronics. The stock trades about -0.19 of its potential returns per unit of risk. The Photronics is currently generating about -0.02 of returns per unit of risk over similar time horizon. If you would invest 2,439 in Photronics on November 1, 2024 and sell it today you would lose (157.00) from holding Photronics or give up 6.44% 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. Photronics
Performance |
| Timeline |
| Axcelis Technologies |
| Photronics |
Axcelis Technologies and Photronics Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Axcelis Technologies and Photronics
The main advantage of trading using opposite Axcelis Technologies and Photronics positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Axcelis Technologies position performs unexpectedly, Photronics 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 Photronics will offset losses from the drop in Photronics' long position.| Axcelis Technologies vs. Diodes Incorporated | Axcelis Technologies vs. Daqo New Energy | Axcelis Technologies vs. Micron Technology | Axcelis Technologies vs. MagnaChip Semiconductor |
| Photronics vs. Diodes Incorporated | Photronics vs. Daqo New Energy | Photronics vs. Micron Technology | Photronics vs. MagnaChip Semiconductor |
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 Efficient Frontier module to plot and analyze your portfolio and positions against risk-return landscape of the market..
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