Correlation Between Microsoft and Axcelis Technologies

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

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

Diversification Opportunities for Microsoft and Axcelis Technologies

0.87

Correlation Coefficient

Microsoft  Axcelis Technologies

Very poor diversification

The 3 months correlation between Microsoft and Axcelis is 0.87. Overlapping area represents the amount of risk that can be diversified away by holding Microsoft and Axcelis Technologies in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Axcelis Technologies and Microsoft 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 Microsoft 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 Microsoft i.e., Microsoft and Axcelis Technologies go up and down completely randomly.

Pair Corralation between Microsoft and Axcelis Technologies

Given the investment horizon of 90 days Microsoft is expected to generate 1.85 times less return on investment than Axcelis Technologies. But when comparing it to its historical volatility, Microsoft is 3.4 times less risky than Axcelis Technologies. It trades about 0.25 of its potential returns per unit of risk. Axcelis Technologies is currently generating about 0.14 of returns per unit of risk over similar time horizon. If you would invest  6,275  in Axcelis Technologies on May 14, 2025 and sell it today you would earn a total of  1,667  from holding Axcelis Technologies or generate 26.57% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Strong
Accuracy	98.39%
Values	Daily Returns

Microsoft  vs.  Axcelis Technologies

Microsoft

Risk-Adjusted Performance

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in Microsoft are ranked lower than 19 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively weak technical and fundamental indicators, Microsoft unveiled solid returns over the last few months and may actually be approaching a breakup point.

Axcelis Technologies

Risk-Adjusted Performance

Fair

Compared to the overall equity markets, risk-adjusted returns on investments in Axcelis Technologies are ranked lower than 10 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively uncertain essential indicators, Axcelis Technologies unveiled solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Microsoft and Axcelis Technologies

The main advantage of trading using opposite Microsoft and Axcelis Technologies positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Microsoft 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.

The idea behind Microsoft and Axcelis Technologies 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.

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 Cryptocurrency Center module to build and monitor diversified portfolio of extremely risky digital assets and cryptocurrency.