Correlation Between Axcelis Technologies and Taiwan Semiconductor
Can any of the company-specific risk be diversified away by investing in both Axcelis Technologies and Taiwan Semiconductor 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 Taiwan Semiconductor into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Axcelis Technologies and Taiwan Semiconductor Manufacturing, you can compare the effects of market volatilities on Axcelis Technologies and Taiwan Semiconductor 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 Taiwan Semiconductor. Check out your portfolio center. Please also check ongoing floating volatility patterns of Axcelis Technologies and Taiwan Semiconductor.
Diversification Opportunities for Axcelis Technologies and Taiwan Semiconductor
-0.58 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Axcelis and Taiwan is -0.58. Overlapping area represents the amount of risk that can be diversified away by holding Axcelis Technologies and Taiwan Semiconductor Manufactu in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Taiwan Semiconductor 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 Taiwan Semiconductor. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Taiwan Semiconductor has no effect on the direction of Axcelis Technologies i.e., Axcelis Technologies and Taiwan Semiconductor go up and down completely randomly.
Pair Corralation between Axcelis Technologies and Taiwan Semiconductor
Given the investment horizon of 90 days Axcelis Technologies is expected to under-perform the Taiwan Semiconductor. In addition to that, Axcelis Technologies is 1.35 times more volatile than Taiwan Semiconductor Manufacturing. It trades about -0.3 of its total potential returns per unit of risk. Taiwan Semiconductor Manufacturing is currently generating about -0.15 per unit of volatility. If you would invest 20,344 in Taiwan Semiconductor Manufacturing on August 26, 2024 and sell it today you would lose (1,336) from holding Taiwan Semiconductor Manufacturing or give up 6.57% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Axcelis Technologies vs. Taiwan Semiconductor Manufactu
Performance |
| Timeline |
| Axcelis Technologies |
| Taiwan Semiconductor |
Axcelis Technologies and Taiwan Semiconductor Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Axcelis Technologies and Taiwan Semiconductor
The main advantage of trading using opposite Axcelis Technologies and Taiwan Semiconductor positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Axcelis Technologies position performs unexpectedly, Taiwan Semiconductor 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 Taiwan Semiconductor will offset losses from the drop in Taiwan Semiconductor's long position.| Axcelis Technologies vs. Teradyne | Axcelis Technologies vs. IPG Photonics | Axcelis Technologies vs. Applied Materials |
| Taiwan Semiconductor vs. NVIDIA | Taiwan Semiconductor vs. Intel | Taiwan Semiconductor vs. Marvell Technology Group | Taiwan Semiconductor vs. Micron Technology |
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 Portfolio Volatility module to check portfolio volatility and analyze historical return density to properly model market risk.
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