Correlation Between ASML Holding and Axcelis Technologies
Can any of the company-specific risk be diversified away by investing in both ASML Holding and Axcelis Technologies 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 ASML Holding and Axcelis Technologies into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between ASML Holding NV and Axcelis Technologies, you can compare the effects of market volatilities on ASML Holding and Axcelis Technologies 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 ASML Holding with a short position of Axcelis Technologies. Check out your portfolio center. Please also check ongoing floating volatility patterns of ASML Holding and Axcelis Technologies.
Diversification Opportunities for ASML Holding and Axcelis Technologies
0.91 | Correlation Coefficient |
Almost no diversification
The 3 months correlation between ASML and Axcelis is 0.91. Overlapping area represents the amount of risk that can be diversified away by holding ASML Holding NV and Axcelis Technologies in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Axcelis Technologies and ASML Holding 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 ASML Holding NV are associated (or correlated) with Axcelis Technologies. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Axcelis Technologies has no effect on the direction of ASML Holding i.e., ASML Holding and Axcelis Technologies go up and down completely randomly.
Pair Corralation between ASML Holding and Axcelis Technologies
Given the investment horizon of 90 days ASML Holding NV is expected to generate 0.73 times more return on investment than Axcelis Technologies. However, ASML Holding NV is 1.38 times less risky than Axcelis Technologies. It trades about -0.11 of its potential returns per unit of risk. Axcelis Technologies is currently generating about -0.31 per unit of risk. If you would invest 70,701 in ASML Holding NV on August 27, 2024 and sell it today you would lose (3,413) from holding ASML Holding NV or give up 4.83% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
ASML Holding NV vs. Axcelis Technologies
Performance |
| Timeline |
| ASML Holding NV |
| Axcelis Technologies |
ASML Holding and Axcelis Technologies Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with ASML Holding and Axcelis Technologies
The main advantage of trading using opposite ASML Holding and Axcelis Technologies positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if ASML Holding position performs unexpectedly, Axcelis Technologies 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 Axcelis Technologies will offset losses from the drop in Axcelis Technologies' long position.| ASML Holding vs. Applied Materials | ASML Holding vs. KLA Tencor | ASML Holding vs. Axcelis Technologies | ASML Holding vs. Teradyne |
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 Balance Of Power module to check stock momentum by analyzing Balance Of Power indicator and other technical ratios.
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