Correlation Between IPG Photonics and Axcelis Technologies
Can any of the company-specific risk be diversified away by investing in both IPG Photonics 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 IPG Photonics and Axcelis Technologies into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between IPG Photonics and Axcelis Technologies, you can compare the effects of market volatilities on IPG Photonics 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 IPG Photonics with a short position of Axcelis Technologies. Check out your portfolio center. Please also check ongoing floating volatility patterns of IPG Photonics and Axcelis Technologies.
Diversification Opportunities for IPG Photonics and Axcelis Technologies
0.44 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between IPG and Axcelis is 0.44. Overlapping area represents the amount of risk that can be diversified away by holding IPG Photonics and Axcelis Technologies in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Axcelis Technologies and IPG Photonics 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 IPG Photonics 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 IPG Photonics i.e., IPG Photonics and Axcelis Technologies go up and down completely randomly.
Pair Corralation between IPG Photonics and Axcelis Technologies
Given the investment horizon of 90 days IPG Photonics is expected to generate 15.99 times less return on investment than Axcelis Technologies. But when comparing it to its historical volatility, IPG Photonics is 1.06 times less risky than Axcelis Technologies. It trades about 0.01 of its potential returns per unit of risk. Axcelis Technologies is currently generating about 0.1 of returns per unit of risk over similar time horizon. If you would invest 6,918 in Axcelis Technologies on October 20, 2024 and sell it today you would earn a total of 243.00 from holding Axcelis Technologies or generate 3.51% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
IPG Photonics vs. Axcelis Technologies
Performance |
| Timeline |
| IPG Photonics |
| Axcelis Technologies |
IPG Photonics and Axcelis Technologies Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with IPG Photonics and Axcelis Technologies
The main advantage of trading using opposite IPG Photonics and Axcelis Technologies positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if IPG Photonics 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.| IPG Photonics vs. Teradyne | IPG Photonics vs. Ultra Clean Holdings | IPG Photonics vs. Onto Innovation | IPG Photonics vs. Cohu Inc |
| Axcelis Technologies vs. inTest | Axcelis Technologies vs. Lam Research Corp | Axcelis Technologies vs. Photronics | Axcelis Technologies vs. indie 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 Bond Analysis module to evaluate and analyze corporate bonds as a potential investment for your portfolios..
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