Correlation Between Micron Technology and Axcelis Technologies
Can any of the company-specific risk be diversified away by investing in both Micron Technology 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 Micron Technology and Axcelis Technologies into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Micron Technology and Axcelis Technologies, you can compare the effects of market volatilities on Micron Technology 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 Micron Technology with a short position of Axcelis Technologies. Check out your portfolio center. Please also check ongoing floating volatility patterns of Micron Technology and Axcelis Technologies.
Diversification Opportunities for Micron Technology and Axcelis Technologies
-0.36 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Micron and Axcelis is -0.36. Overlapping area represents the amount of risk that can be diversified away by holding Micron Technology and Axcelis Technologies in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Axcelis Technologies and Micron Technology 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 Micron Technology 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 Micron Technology i.e., Micron Technology and Axcelis Technologies go up and down completely randomly.
Pair Corralation between Micron Technology and Axcelis Technologies
Assuming the 90 days trading horizon Micron Technology is expected to generate 0.97 times more return on investment than Axcelis Technologies. However, Micron Technology is 1.03 times less risky than Axcelis Technologies. It trades about 0.02 of its potential returns per unit of risk. Axcelis Technologies is currently generating about -0.15 per unit of risk. If you would invest 9,184 in Micron Technology on September 1, 2024 and sell it today you would earn a total of 63.00 from holding Micron Technology or generate 0.69% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Micron Technology vs. Axcelis Technologies
Performance |
| Timeline |
| Micron Technology |
| Axcelis Technologies |
Micron Technology and Axcelis Technologies Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Micron Technology and Axcelis Technologies
The main advantage of trading using opposite Micron Technology and Axcelis Technologies positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Micron Technology 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.| Micron Technology vs. WT OFFSHORE | Micron Technology vs. Caseys General Stores | Micron Technology vs. SOLSTAD OFFSHORE NK | Micron Technology vs. COSTCO WHOLESALE CDR |
| Axcelis Technologies vs. Apple Inc | Axcelis Technologies vs. Apple Inc | Axcelis Technologies vs. Apple Inc | Axcelis Technologies vs. Apple Inc |
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 Stock Screener module to find equities using a custom stock filter or screen asymmetry in trading patterns, price, volume, or investment outlook..
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