Correlation Between Axcelis Technologies and Advanced Micro

Can any of the company-specific risk be diversified away by investing in both Axcelis Technologies and Advanced Micro 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 Advanced Micro into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between Axcelis Technologies and Advanced Micro Devices, you can compare the effects of market volatilities on Axcelis Technologies and Advanced Micro 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 Advanced Micro. Check out your portfolio center. Please also check ongoing floating volatility patterns of Axcelis Technologies and Advanced Micro.

Diversification Opportunities for Axcelis Technologies and Advanced Micro

0.84

Correlation Coefficient

Axcelis Technologies  Advanced Micro

Very poor diversification

The 3 months correlation between Axcelis and Advanced is 0.84. Overlapping area represents the amount of risk that can be diversified away by holding Axcelis Technologies and Advanced Micro Devices in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Advanced Micro Devices 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 Advanced Micro. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Advanced Micro Devices has no effect on the direction of Axcelis Technologies i.e., Axcelis Technologies and Advanced Micro go up and down completely randomly.

Pair Corralation between Axcelis Technologies and Advanced Micro

Given the investment horizon of 90 days Axcelis Technologies is expected to under-perform the Advanced Micro. In addition to that, Axcelis Technologies is 1.01 times more volatile than Advanced Micro Devices. It trades about -0.05 of its total potential returns per unit of risk. Advanced Micro Devices is currently generating about 0.01 per unit of volatility. If you would invest  11,947  in Advanced Micro Devices on February 20, 2025 and sell it today you would lose (354.00) from holding Advanced Micro Devices or give up 2.96% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Strong
Accuracy	100.0%
Values	Daily Returns

Axcelis Technologies  vs.  Advanced Micro Devices

Axcelis Technologies

Risk-Adjusted Performance

Very Weak

Over the last 90 days Axcelis Technologies has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of comparatively stable essential indicators, Axcelis Technologies is not utilizing all of its potentials. The newest stock price uproar, may contribute to short-horizon losses for the private investors.

Advanced Micro Devices

Risk-Adjusted Performance

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in Advanced Micro Devices are ranked lower than 1 (%) of all global equities and portfolios over the last 90 days. In spite of rather sound primary indicators, Advanced Micro is not utilizing all of its potentials. The recent stock price tumult, may contribute to shorter-term losses for the shareholders.

Pair Trading with Axcelis Technologies and Advanced Micro

The main advantage of trading using opposite Axcelis Technologies and Advanced Micro positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Axcelis Technologies position performs unexpectedly, Advanced Micro 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 Advanced Micro will offset losses from the drop in Advanced Micro's long position.

The idea behind Axcelis Technologies and Advanced Micro Devices pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.

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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.