Correlation Between Axcelis Technologies and Semtech
Can any of the company-specific risk be diversified away by investing in both Axcelis Technologies and Semtech 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 Semtech into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Axcelis Technologies and Semtech, you can compare the effects of market volatilities on Axcelis Technologies and Semtech 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 Semtech. Check out your portfolio center. Please also check ongoing floating volatility patterns of Axcelis Technologies and Semtech.
Diversification Opportunities for Axcelis Technologies and Semtech
0.19 | Correlation Coefficient |
Average diversification
The 3 months correlation between Axcelis and Semtech is 0.19. Overlapping area represents the amount of risk that can be diversified away by holding Axcelis Technologies and Semtech in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Semtech 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 Semtech. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Semtech has no effect on the direction of Axcelis Technologies i.e., Axcelis Technologies and Semtech go up and down completely randomly.
Pair Corralation between Axcelis Technologies and Semtech
Given the investment horizon of 90 days Axcelis Technologies is expected to generate 0.37 times more return on investment than Semtech. However, Axcelis Technologies is 2.7 times less risky than Semtech. It trades about -0.2 of its potential returns per unit of risk. Semtech is currently generating about -0.3 per unit of risk. If you would invest 7,161 in Axcelis Technologies on November 18, 2024 and sell it today you would lose (1,055) from holding Axcelis Technologies or give up 14.73% 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. Semtech
Performance |
| Timeline |
| Axcelis Technologies |
| Semtech |
Axcelis Technologies and Semtech Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Axcelis Technologies and Semtech
The main advantage of trading using opposite Axcelis Technologies and Semtech positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Axcelis Technologies position performs unexpectedly, Semtech 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 Semtech will offset losses from the drop in Semtech's long position.| Axcelis Technologies vs. inTest | Axcelis Technologies vs. Lam Research Corp | Axcelis Technologies vs. Photronics | Axcelis Technologies vs. indie Semiconductor |
| Semtech vs. Power Integrations | Semtech vs. Diodes Incorporated | Semtech vs. MACOM Technology Solutions | Semtech vs. Cirrus Logic |
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 Watchlist Optimization module to optimize watchlists to build efficient portfolios or rebalance existing positions based on the mean-variance optimization algorithm.
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