Correlation Between Silicon Laboratories and Axcelis Technologies

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

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

Diversification Opportunities for Silicon Laboratories and Axcelis Technologies

0.93

Correlation Coefficient

Silicon Laboratories  Axcelis Technologies

Almost no diversification

The 3 months correlation between Silicon and Axcelis is 0.93. Overlapping area represents the amount of risk that can be diversified away by holding Silicon Laboratories and Axcelis Technologies in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Axcelis Technologies and Silicon Laboratories 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 Silicon Laboratories 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 Silicon Laboratories i.e., Silicon Laboratories and Axcelis Technologies go up and down completely randomly.

Pair Corralation between Silicon Laboratories and Axcelis Technologies

Given the investment horizon of 90 days Silicon Laboratories is expected to generate 1.41 times less return on investment than Axcelis Technologies. But when comparing it to its historical volatility, Silicon Laboratories is 1.15 times less risky than Axcelis Technologies. It trades about 0.18 of its potential returns per unit of risk. Axcelis Technologies is currently generating about 0.23 of returns per unit of risk over similar time horizon. If you would invest  4,911  in Axcelis Technologies on May 1, 2025 and sell it today you would earn a total of  2,406  from holding Axcelis Technologies or generate 48.99% return on investment over 90 days.

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

Silicon Laboratories  vs.  Axcelis Technologies

Silicon Laboratories

Risk-Adjusted Performance

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Silicon Laboratories are ranked lower than 14 (%) of all global equities and portfolios over the last 90 days. Despite somewhat weak basic indicators, Silicon Laboratories sustained solid returns over the last few months and may actually be approaching a breakup point.

Axcelis Technologies

Risk-Adjusted Performance

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in Axcelis Technologies are ranked lower than 17 (%) 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 Silicon Laboratories and Axcelis Technologies

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

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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 Portfolio Analyzer module to portfolio analysis module that provides access to portfolio diagnostics and optimization engine.